AFLAC & FLEISHMAN-HILLARD
AFLAC GIVES SHAREHOLDERS A 'SAY ON PAY'
IT MAY BE BEST KNOWN AMONG THE GENERAL PUBLIC FOR ITS DUCK MASCOT, BUT AFLAC HAD OTHER THINGS ON ITS MIND STARTING IN 2006, WHEN SOME OF ITS SHAREHOLDERS INQUIRED ABOUT VOTING
ON EXECUTIVE COMPENSATION--SOMETHING THAT IS WIDELY CRITICIZED BY THE INVESTOR COMMUNITY. BENT ON PUTTING THE NEEDS OF THEIR SHAREHOLDERS FIRST, THE LIFE INSURANCE COMPANY
EXECUTIVES DECIDED TO TAKE A RISK AND BECOME THE FIRST MAJOR U.S. PUBLIC COMPANY TO PERMIT A SHAREHOLDER VOTE ON THE ISSUE--A MOVE THAT, IF IT RESULTED IN A LACK OF POPULAR
SUPPORT, WOULD DAMAGE THE ORGANIZATION'S REPUTATION AND LEAD TO A NECESSARY REVISION OF COMPENSATION PRACTICES.
TESTING, TESTING, 1, 2, 3
THE COMMUNICATIONS TEAM HAD TO CONVEY TO SHAREHOLDERS THAT AFLAC'S CURRENT COMPENSATION WAS FAIR AND APPROPRIATE, AND THAT ITS POSITIVE FINANCIAL PERFORMANCE COULD BE LINKED TO
THE COMPANY'S LEADERSHIP. BEGINNING WITH THE FEBRUARY 2007 ANNOUNCEMENT THAT SHAREHOLDERS WOULD VOTE IN MAY 2008, THE EXECS DEVELOPED THE "SAY ON PAY" CAMPAIGN, TARGETING BUSINESS
MEDIA AS VEHICLE FOR INFLUENCING INVESTORS AND ACTIVIST SHAREHOLDERS--A GROUP THAT IS TYPICALLY CRITICAL OF CORPORATE GOVERNANCE--TO VOTE IN APPROVAL OF THE PAY PROGRAM.
"MESSAGES TARGETING INVESTORS ARE, IN EFFECT, TARGETING THE MOST KNOWLEDGEABLE PORTION OF A COMPANY'S AUDIENCE," SAYS JON SULLIVAN, EXECUTIVE PUBLICIST/EXTERNAL COMMUNICATIONS,
AFLAC. "IT STANDS TO REASON THAT THEY HAVE THE MOST INTEREST IN KNOWING ABOUT THE COMPANY, ITS PRACTICES AND ITS CULTURE, [SO] IT WAS IMPERATIVE THAT THE PRIMARY MEDIA
SPOKESPEOPLE BE ON THE SAME PAGE WITH REGARD TO THE MESSAGE."
TO ENSURE JUST THAT, THE TEAM RELIED ON THE FOLLOWING STRATEGIES AND TACTICS:
- TESTED THE EFFECTIVENESS OF MESSAGES WITH REGIONAL MEDIA BEFORE TARGETING NATIONAL OUTLETS;
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RESEARCHED THE ISSUE TO ARM CEO DAN AMOS WITH TALKING POINTS THAT JUSTIFIED AFLAC'S FAIRNESS OF COMPENSATION;
-
REFERRED BUSINESS REPORTERS TO PERTINENT SHAREHOLDER ACTIVISTS WHO WOULD PROVIDE A COUNTER-INTUITIVE ASPECT OF THE STORY, WHICH THE AFLAC TEAM POSITIONED AS A TREND STORY;
-
OFFERED UNPRECEDENTED ACCESS TO AMOS FOR NATIONAL MEDIA OUTLETS AND IN-PERSON INTERVIEWS; AND,
-
SENT OUT NEWS RELEASES THROUGHOUT THE YEAR LEADING UP TO THE VOTE TO KEEP THE ISSUE TOP-OF-MIND.
QUALITY INSURANCE
THE COMMUNICATIONS TEAM SECURED A LAUNDRY LIST OF MEDIA HIGHLIGHTS, MANY OF WHICH COVERED AFLAC'S FORWARD-THINKING APPROACH IN ALLOWING SHAREHOLDERS TO HAVE A "SAY ON PAY."
BUT, SAYS SULLIVAN, IT'S IMPORTANT TO FOCUS MEDIA OUTREACH EFFORTS WHEN THE SUBJECT IS CONTROVERSIAL.
"NOT ALL MEDIA IS GOOD MEDIA," HE SAYS. "BE PREPARED TO BE SELECTIVE ABOUT SPOKESPERSON ACCESS, AND ENDURE THE POSSIBLE CONSEQUENCES IN EXCHANGE FOR AN OUTCOME TAT IS FAVORABLE
OVERALL."
FOR AFLAC IN PARTICULAR, THAT OUTCOME WAS INDEED FAVORABLE: 93% OF SHAREHOLDERS VOTED TO AFFIRM EXECUTIVE COMPENSATION. "THE KEY TO AN INVESTOR RELATIONS CAMPAIGN," SAYS
SULLIVAN, "IS TO ENSURE THAT THE INVESTORS ARE PART OF THE SOLUTION."