Silence Can Create a Lack of Confidence; Communication Reduces Risk, Can Even Save Share Price

amosSMAFLAC Chairman and CEO Daniel Amos has long endorsed transparency. AFLAC was one of the pioneers in offering a non-binding Say on Pay (SOP) vote voluntarily in the spring of 2008, prior to the financial crisis and Dodd-Frank.lack

In his recent comments at a financial industry conference in New York he conveyed what his company has learned in practice. “What did we do wrong,” was their initial reaction when AFLAC investors asked for the SOP prior to the new regulations.  Directors and management “came to the shared belief that investors should have the right to know how the compensation packages at a company are calculated.”

In his view, lack of transparency has an impact on stock price because it creates uncertainty for investors. Companies should view Say on Pay votes as part of an ongoing effort to be more transparent with investors. AFLAC’s conclusion is that open communication with investors and analysts is better for long-term growth.