Glass Lewis& Co. recommended a vote against the approval of 's amended executiveincentive plan, concluding that the "plan failed just enough for ourcriteria to fail," as disclosed in the company's definitive proxystatement filed April 5.
The proxyadviser objected to the EIP's adjustment of annual awards after a performanceperiod ends by up to 25% and a share cap provision at 2% of outstanding shares.
Accordingto Glass Lewis, both goals and awards should be determined before theperformance period begins and not be altered, the filing noted. Theadviser called the share cap provision an "evergreen provision,"which, it said, could reduce or eliminate the need for management to seekshareholder authorization for the equity-based compensation program.
The SouthBend, Ind.-based company said Glass Lewis's concern on the first issue is amisreading of the terms of the plan, and called its findings"erroneous." The adviser's criticism on the share cap provisionreflects an indiscriminate application and disregards multiple practicalconsiderations, the company added in its filing.
1st SourceCorp. is asking shareholders to vote in favor of the EIP plan at the annualmeeting to be held April 21.