'THE DAILY CORPORATE GOVERNANCE REPORT’ (for public company boards, the C-suite and GCs)

? ? ? ? ?Please see the items below with the related links (NOTE: access to link content may be metered, require a no-charge registration or require a paid digital subscription)?

? ? ? ? ? ? ? (i) latest report on director compensation at the S&P 500 companies/director compensation at Mattel under its 'director compensation program':

? ? ? ? ? ? ? ? ? ? (a) Data on director compensation at the largest U.S companies was recently provided by executive compensation consulting firm Compensation Advisory Partners?(CAP)?in its 2023 report,?"Director Compensation: Increases Are Back Among the Largest US Companies"?(see item (i) from Sept. 11/23); by Spencer Stuart in its "2023 U.S. Spencer Stuart Board Index"?(see item (i) from Oct. 2/23); and by WTW (Willis Towers Watson)?in?its report on director compensation at the S&P 500 companies, "2023 U.S. director pay trends: An analysis of director pay programs at S&P 500 companies" (see item (i) from Jan. 10/24).?

? ? ? ? ? ? ? ? ? ? ? ? ?The latest data on director compensation comes in this report released this month by compensation consultants ClearBridge?Compensation Group, "Non-Employee Director Compensation Report", which "analyzes pay levels and practices for non-employee directors at 100 large-cap companies", being 100 of the S&P 500 companies (as?well as at 100 small-cap and 100 mid-cap companies.) In particular, the report provides data on each of the following:

? ? ? ? ? ? ? ? ? ? ? ? ?"-- Compensation for Board Service

? ? ? ? ? ? ? ? ? ? ? ? ? – Compensation for Committee Service ? ? ? ? ? ? ? ? ? ? ? ? ? – Compensation for Board Leadership ? ? ? ? ? ? ? ? ? ? ? ? ? -- Equity Design Features ? ? ? ? ? ? ? ? ? ? ? ? ? – Stock Ownership Guidelines ? ? ? ? ? ? ? ? ? ? ? ? ? – Holding Requirements & Deferral Features?

? ? ? ? ? ? ? ? ? ? ? ? ? – Director Perquisites"

? ? ? ? ? ? ? ? ? ? ? ? (b) Last Wednesday, Mattel, Inc.?announced in this press release?that Julius Genachowski and Dawn Ostroff?were joining the company's board of directors. In the related Current Report?filed with the SEC, the compensation that each director will receive under the company's?"director compensation program"?is disclosed, as follows:

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? "On February 5, 2024, the Board of Directors of the Company elected Julius Genachowski and Dawn Ostroff as new directors of Mattel, appointed Mr. Genachowski to the Audit Committee and Governance and Social Responsibility Committee of the Board, and appointed Ms. Ostroff to the Compensation Committee of the Board, each effective February 5, 2024.?

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?"The Board determined that Mr. Genachowski and Ms. Ostroff are independent as defined by the Nasdaq listing standards.?In accordance with Mattel’s director compensation program, Mr. Genachowski will receive a cash retainer of $38,333, Ms. Ostroff will receive a cash retainer of $35,000, and they will each receive a stock grant with a value of $55,004 (based on the closing price of Mattel’s common stock on the grant date of February 5, 2024), which represents a pro-ration of the annual director compensation based on the number of months (including partial months) they will serve from February 2024 to the date of Mattel’s 2024 Annual Meeting of Stockholders....."

? ? ? ? ? ? ? (ii) PwC report on board oversight of cyber risk: In January, PwC posted on its Governance Insights Center webpage this report, "Overseeing cyber risk: the board's role." The report outlines "four key areas in which boards should take action to support their companies in establishing effective cybersecurity risk management programs":

? ? ? ? ? ? ? ? ? ? ?"1. Work with management to embed cyber risk in strategic decisions — and the company’s culture

? ? ? ? ? ? ? ? ? ? ? 2. Understand the cyber risk management program

? ? ? ? ? ? ? ? ? ? ? 3. Monitor cyber resilience

? ? ? ? ? ? ? ? ? ? ? 4. Rethink the board’s cyber oversight allocation"

? ? ? ? ? ? ? Below is from the section "Rethink the board’s cyber oversight allocation":

? ? ? ? ? ? ??"By now, all boards have allocated cyber risk oversight somewhere — either to a committee or the full board. But boards periodically should reassess their allocation to determine that it is effective. Current survey data indicates that 51% of S&P 500 company boards allocate?responsibility to the audit committee.?Given all the audit committee has on its agenda these days,?boards should consider whether this committee has adequate time and the right skills to oversee this area.?

? ? ? ? ? ? ? "Some boards have deemed cybersecurity oversight a full board responsibility, taking it out of committee, while other boards have allocated this responsibility to a separate technology or cyber committee. However, only a very limited number of boards have these separate standalone committees.?No matter where oversight sits if at the committee level, it’s?important that the full board gets regular and comprehensive updates......

? ? ? ? ? ? ? "With the increasing concern about cyber risk, many boards are engaging with the CISO (or other executive, such as the CIO or whoever is tasked with managing the company’s cyber program) on at least a quarterly basis.?This is a shift from the once-or-twice-a-year frequency of reporting that was common just a few years ago. Some boards today are also implementing private sessions with the CISO where they can ask about support from management and even adequacy of resources. The board should confirm it has adequate touchpoints with the CISO.

? ? ? ? ? ? ???"With the technical nature of cybersecurity and the evolving risk landscape,?it’s important that the board has the skills and expertise needed, or has access to skills and expertise, to oversee this area.?The question of whether boards should fill a director seat with someone who has cyber skills is one that is determined by each board based on the company’s industry and risk profile. While this decision may be appropriate for a particular board,?it poses two risks to be mindful of:

? ? ? ? ? ? ? ? ?-- Adding a director who has very narrow expertise and may not contribute to other board?agenda topics

? ? ? ? ? ? ? ? ?-- Creating an authority bias among directors when it comes to cyber discussions and decisions — with a cyber expert on the board, other directors may be much less willing to?voice their opinions on the subject

? ? ? ? ? ? ? ???"An alternative to adding a board director with cyber skills is upskilling the existing board or committee members. This can be done by having management deliver board education?sessions. Some boards have the CISO walk through the top risks or mitigating program elements at every, or every other, committee and/or board meeting along with other upskilling?opportunities. These can include hearing from external parties or organizations on the threat?landscape and leading practices, obtaining board-level cyber certifications and attending?external cyber programs....."

? ? ? ? ? ? ? (iii) Lyft's correction of an error in its Q4/FY 2023 earnings release/'corrected' press release and amended SEC filing of the day: Lyft, Inc.?issued its Q4/FY 2023 earnings press release yesterday, but it contained an error which caused the company's stock price to soar.?Here is how the error is described in this WSJ article yesterday, "Lyft Earnings Typo Sends Stock Soaring":

? ? ? ? ? ? ? ? ???"Lyft shares soared over 60% in after-hours trading Tuesday after its earnings release accidentally added an extra zero to a key profitability metric.?Lyft’s release said one of its profit margins was expected to expand by 500 basis points—or 5 percentage points—in 2024. That margin was only expected to expand by 50 basis points, the company’s chief financial officer later clarified on a call with analysts.

? ? ? ? ? ? ? ? ? ? ?"The figure in question is a wonky but closely watched metric. The ride-sharing company was forecasting its adjusted earnings margin as a percentage of its bookings. A higher margin signals that Lyft is earning a bigger cut from its bookings. The company’s stock soared over 60% when the release came out after the close of regular trading. Many stock trades are done by computers, reacting in fractions of seconds to new information.?The inflated margin likely triggered a buying frenzy before most people could digest the numbers......

? ? ? ? ? ? ? ? ? ? ? "Earnings typos are rare but happen occasionally. Market watchers said they couldn’t remember the last time a typo triggered such a big stock reaction.?A Lyft spokeswoman described the mistake as “a clerical error” and said the company worked to clarify it as soon as possible......"

? ? ? ? ? ? ? ? ? ? ?As noted in this Bloomberg?article, "A ‘Clerical Error’ in Lyft Outlook Triggered 67% Stock Jump":

? ? ? ? ? ? ? ? ??? ?"Less than an hour after issuing the statement, Lyft Chief Financial Officer?Erin Brewer?joined a call with analysts?and said the company is actually expecting margins to expand by 50 basis points — not 500 — acknowledging, when asked by an analyst, that the press release was incorrect. A company spokesperson later attributed the mistake to a “clerical error,”?and the company eventually corrected its statement and regulatory filings......?Dan Ives, an analyst at Wedbush Securities.....said by email that he’d “never seen an error like this in my almost 25 years on the Street.”

? ? ? ? ? ? ? ? ? ? This is?the press release Lyft?issued to replace and correct the previous one, marked at the top, "CORRECTING AND REPLACING", with its introductory paragraph reading as follows:

? ? ? ? ? ? ? ? ? ? "Fifth bulleted list, third bullet of release should read: Adjusted EBITDA margin expansion (calculated as a percentage of Gross Bookings) of approximately 50 basis points year-over-year. [instead of Adjusted EBITDA margin expansion (calculated as a percentage of Gross Bookings) of approximately 500 basis points year-over-year.?The updated release reads: ........

? ? ? ? ? ? ? ? ? ?Below is from the related amended Current Report?filed with the SEC:

? ? ? ? ? ? ? ? ???"This Amendment to the Current Report on Form 8-K filed by Lyft, Inc.?on February 13, 2024 is being filed to correct a clerical error in the 2024 directional commentary contained in the press release issued by Lyft on February 13, 2024 announcing Lyft’s financial results?for the quarter and fiscal year ended December 31, 2023. A corrected copy of the Press Release is furnished?as Exhibit 99.1 to this Amendment and is incorporated herein by reference....."

? ? ? ? ? ? (iv) prominent activist Elliott Investment wins seat on Phillips 66 board/press release of the day: ?On Nov. 29/23, prominent activist hedge fund Elliott Investment?Management announced?in this press release?that it had made an investment?of about $1 billion in NYSE-listed, diversified energy company Phillips?66 (a spinoff of ConocoPhillips in 2012), and had sent this letter?to the company's Board of Directors inter alia seeking "two highly qualified new directors, to which Phillips 66?responded the same day in this press release, inter alia stating that "over the last several weeks, the company has held discussions with Elliott and plans to continue a constructive dialogue" (see item (v)(b) from Dec. 4/23). As reported in this WSJ story yesterday, "Phillips 66 Names Elliott-Backed Director to Board", "Oil refiner Phillips 66 named former Cenovus executive Robert W. Pease to its board, succumbing to pressure from activist investor Elliott Investment Management." Below is from the Phillips 66 press release yesterday announcing the board appointment:

? ? ? ? ? ? ? ? ? "The Board of Directors of Phillips 66 has appointed Robert W. Pease to serve on the board, effective immediately. Following the appointment, the board consists of 14 directors, 12 of whom are independent. In addition, Phillips 66 and Elliott Investment Management L.P. have agreed to work together to identify a second mutually agreed director to be named over the coming months.

? ? ? ? ? ? ? ? ???"Phillips 66 is pleased to welcome Bob to the board......", stated Greg Garland, executive chairman of the board. “Bob.... joins Phillips 66 after collaborative discussions with one of our largest investors. We appreciate the constructive engagement that we have had with Elliott in adding a highly qualified independent director.”

? ? ? ? ? ? ? ? ? ?“We have worked collaboratively with Phillips 66 on the board’s appointment of Bob, who will bring extensive experience in refining and the energy industry more broadly,” said Elliott Partner John Pike and Senior Portfolio Manager Mike Tomkins. 'As a large investor, we believe Phillips 66 would substantially increase shareholder value by hitting the enhanced targets it has outlined. We look forward to continuing our work with Phillips 66 to identify an additional director who can add valuable perspectives and experience to the board.'......"

? ? ? ? ? ? ? (v) (other)?press release of the day: Moody's Corporation announced on Aug. 3/23 in this press release, the departure of its CFO,?with the Chief Accounting Officer & Corporate Controller assuming the role of interim CFO (see item (xi)(f) from Sept. 5/23). Yesterday, Moody's?announced?in this press release??the appointment of a permanent CFO from outside the company,?as follows:

? ? ? ? ? ? ? ? ??? "Moody's Corporation announced today that Noémie Heuland will join the Company on April 1, 2024 as Senior Vice President and Chief Financial Officer (CFO).....She joins Moody’s from Dayforce (NYSE: DAY, formerly Ceridian), a global human capital management software company, where she has served as Executive Vice President and CFO since 2020.......

? ? ? ? ? ? ? ? ? ? ? ?"As CFO, Ms. Heuland will lead Moody’s global finance organization, which includes accounting and controllership, financial planning and analysis, financial systems, investor relations, strategic sourcing and procurement, and tax and treasury......Rob Fauber, President and Chief Executive Officer at Moody’s said...."I also want to thank Caroline Sullivan for her leadership and support as Interim CFO, particularly during the important year-end period. We look forward to her continued contributions as our Chief Accounting Officer and Corporate Controller.”

? ? ? ? ? ? ? ? ? ? ?Compensation arrangements with the new CFO are disclosed in the related Current Report?filed with the SEC.

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