From Proxy Advisor to Comp Consultant: Trey Poore Joins Farient
March 21, 2023
Trey Poore recently joined Farient Advisors as a Director, where he manages client relationships, supports business development efforts, and oversees project teams. Specifically, Trey advises clients on corporate governance and executive compensation matters and helps design executive pay-for-performance plans that align with stakeholder interests. In the following interview, Trey offers insight into his approach to compensation and governance work born of his extensive experience as a proxy advisor. In addition, he provides a glimpse into the “adventure” he finds in his work and what he likes to do when he’s not thinking about governance or compensation issues at his 1960s-era cottage a couple of hours from where he lives in Maryland. What follows is an edited transcript of that Q&A.
What do you bring to your consulting work on executive compensation and corporate governance?
Trey: With respect to governance performance, the bar is always getting higher. Shareholder expectations continue to go up year after year. Proxy advisors are also looking for more or better depending on your perspective. Standing still is falling behind and companies can’t just keep doing the same thing year after year and expect that shareholders are going to be satisfied with that. Whether you’re talking about executive compensation or corporate governance practices, investors are generally looking for more rigor and more disclosure. That doesn’t mean that everyone’s in lockstep. For most companies that means improving communication, telling their story, and engaging with shareholders on issues where there there’s either contention, disconnect, or misunderstanding.
Is there a best practice that you have derived from your governance experience that you would recommend specifically to comp committees?
Trey: Two best practices come to mind. One is being able to communicate clearly and completely, with respect to pay decisions: Why are these decisions in the best interest of the company, the executives, and shareholders? Shareholders are interested in understanding why—why this pay program? Why these metrics in the short-term incentive program? Why are these metrics in the long-term incentive program? Why these payout levels? How did the comp committee arrive at these decisions? There’s always going to be somebody who disagrees with the principles of the compensation decision. Laying out how conclusions were arrived at by the committee can address a lot of concerns.
The other best practice is this: Directors and to some extent management need to bear in mind that proxy advisors have a job to do, and it’s not the end-all or be-all. The frameworks that the proxy advisors use, particularly with respect to understanding say on pay, are important analyses that institutional investors rely on for information. But you can’t just appease ISS and Glass Lewis. You must understand what investors are looking for and be responsive to that, particularly related to proxy voting. Institutional investors are under constraints in terms of the amount of information they can absorb. it’s up to companies, particularly through their disclosures, to effectively explain their pay programs.
How do you approach your new role here?
Trey: My foundation in executive compensation and corporate governance was forged in the crucible of the 2008 financial crisis. Nothing really highlights the importance of pay decisions like a board committee meeting every week, or every other week, which was typical during the first few months of the financial crisis and then more recently through the pandemic. It’s not easy for me to talk about myself but I think my approach to governance and compensation issues is informed differently because of all the roles that I’ve had inside companies related to executive compensation and corporate governance and then advising companies. There’s also a real perspective gained from reading, probably at this point, hundreds of CD&A disclosures. I’ve heard the sob stories from companies that felt they were terribly wronged by ISS. I’ve also seen companies that have been able to turn around failed say-on-pay votes. How do people get from a bad place to a good place? What are the misconceptions that management and directors have about the relationship between institutional investors and pay decisions? For example, how do we bridge the gap between what management has seen, what directors are experiencing, and how a proxy advisor works. I’m a stickler for details and understanding the nuances and the balance so that we always remain focused on the things that matter most.
What interests you most about executive compensation as a discipline?
Trey: I’m always interested to hear people’s perspectives on how things arrived at the way they are. So particularly when we’re talking about compensation, and compensation programs, you know, how did we get to where we are on things like structure? Why are why are we using these metrics? What about the business is going on to lead to these decisions? You learn a lot about why things are by learning the history. Sometimes that helps you avoid retreading well-worn paths that lead nowhere.
Why do you think Farient is a good place to further your career?
Trey: Consulting isn’t for everyone. If the prospect of a workday filled with ambiguity and variability makes you want to hide under the covers, it’s probably not the right fit for you. One of the things that’s exciting for me is that every day is an adventure. There is the constant challenge of making progress against stuff that you’ve anticipated, or the regular things that you must work on. There’s always something new, some new questions, some new request, some new teaching from a colleague. I find that exciting and it keeps me interested in the work. It enables me to focus on high-level and low-level questions, which is motivating to me. With respect to Farient, part of the draw was access to folks like Robin, RJ, and the partners who have had extraordinary careers in a wide variety of places. It really offers me an opportunity to learn and understand different perspectives.
What do you like to do when you’re not working?
Trey: The pandemic squashed a lot of fun. I certainly like going to concerts. There are a lot of smaller venues in DC that I’d like to try to rediscover now that pandemic restrictions have eased off. I also recently bought a 1960s-era cottage about two hours from where I live in Maryland, and I’ve been working on renovations—everything from replacing faucets to refinishing old floors and rebuilding retaining walls. Some weekends rather than tackle improvement projects, I just relax and enjoy being in the countryside. There are also more domestic pursuits that I enjoy, like cooking. My specialty is legumes, specifically, beans. My favorites are Ford Hook lima beans and speckled butter beans.
To learn more about Farient’s senior leadership team or Trey’s work history, please click here.
About Farient Advisors
Farient Advisors LLC is an independent premier executive compensation, performance, and corporate governance consultancy. Farient provides a full array of services, linking business strategy to compensation through a tailored, analytically rigorous, and collaborative approach. Farient has locations in Los Angeles, New York, Louisville, and Dallas and works with clients globally through its partnership in the Global Governance and Executive Compensation Group (GECN). Farient is a certified diverse company and is recognized by the Women’s Business Enterprise National Council.