I am a little sad to bid adieu to summer vibes this weekend, but if there is one thing I’m looking forward to – besides my children returning to school and, hopefully, a bedtime for them before 11pm – it’s our “Proxy Disclosure & 23rd Annual Executive Compensation Conferences” – happening October 12-13th in Orlando! With being so close to The Most Magical Place on Earth, our hotel block at The Hilton Orlando is nearly sold out and the few remaining rooms are going fast! Make sure to book now to get your spot.
And if you haven’t registered for the October 12-13th conference, register now in our online membership center. You can also contact us at info@CCRcorp.com or by calling 1-800-737-1271.
As we’ve noted, there will be a lot to talk about. We’ve been working hard to ensure our agenda covers the practical and strategic issues involved with forthcoming SEC rulemaking and other public company trends. And on top of all that, there will be many wonderful people in our community in attendance – it’s a great opportunity to see old and new friends!
Our blogs will be off on Monday for Labor Day – we’ll return Tuesday! Wishing everyone a happy and safe holiday weekend.
We’ve blogged about higher support for say-on-pay resolutions this year. Alongside that, fewer companies are experiencing failed votes. This Glass Lewis update confirms just how pronounced the trend is:
– Average North American say-on-pay support increased slightly year-over-year, and the number of failed proposals was down by more than 20%, particularly outside the S&P 500.
– Among four failed S&P 500 proposals, two were repeat offenders, also failing to receive majority support for the say-on-pay proposal in 2025.
– Excessive CEO granting practices were at the center of all four failed S&P 500 say-on-pay votes.
The Glass Lewis team also noted that one-time awards and increases at the top of the U.S. market drove an increase in average CEO pay. Here’s more detail:
– The total value of one-time awards, and average award size, continued to trend upward. In the S&P 500, $2.7 billion in one-time awards were granted, up 40.8% from the prior year, with average values increasing by 22.7% to $3.7 million. This drove average CEO pay up 17.8% compared to 2025, to $11.5 million. For the Russell 3000, $8.6 billion in one-time awards were granted, up 47.6% from the prior year, with average award size up 34.1% to $2.3 million.
– While the average value of individual sign-on awards fell slightly year-over-year, that of most other one-time award categories saw significant rises compared to the prior year. This was, in part, driven by awards at the top end of the value range.
– The number of S&P 500 CEOs with pay packages of $100 million+ doubled from 5 in 2025 to 10 in 2026.
– Median CEO pay growth continued, though more slowly than in recent years among the S&P 500.
I blogged a few months ago that more companies are providing personal security services to CEOs. This Pay Governance memo says it’s now a majority practice at S&P 500 companies. Additionally, more companies are providing security to non-CEO executives and/or spending more on those arrangements. Pay Governance shared these key findings based on proxy statements filed as of June 15th of this year (and the two prior years, for comparative data):
– Personal security benefits are becoming more common. Among S&P 500 companies, prevalence of CEO personal security increased from 35% to 54% year over year, while approximately 47% of companies now provide personal security to at least one additional named executive officer (NEOs).
– Growth is most pronounced below the CEO level. Median personal security values for other NEOs rose from approximately $10K to $32K, while the 75th percentile increased from approximately $32K to $143K.
– Security programs are becoming more multidimensional. Based on most recent 2026 proxy disclosures, there are increased references to digital protection, cybersecurity monitoring, online privacy services, personal data removal, home network monitoring, and independent risk assessments.
– Personal Aircraft usage values increased. CEO aircraft usage values increased 17% at the median and 37% at the 75th percentile, with meaningful increases also reported for other NEOs.
– Disclosure quality is improving. Disclosures increasingly address digital security, independent risk assessments, and governance oversight.
Looking ahead, the memo notes:
Executive protection is likely to remain an important area of Board and Compensation Committee oversight. Given the elevated risk environment and expanding program scope, prevalence and disclosed value may continue to increase, particularly for certain executives beyond the CEO. The SEC is actively reconsidering whether executive personal security should be treated as a “perk” for disclosure purposes, but no specific changes have been outlined yet. Major shareholders and proxy advisors appear to be focused less on the existence of these benefits alone and more on whether companies provide a clear rationale, disclosure, document appropriate oversight, and explain how the arrangements support shareholder interests.
For Compensation Committees, several practical considerations follow:
– Ground programs in a formal security assessment. The strongest programs are supported by an independent, periodic security assessment rather than ad hoc decisions. This helps establish the appropriateness of the benefit, supports the company’s business rationale, provides consistency of application for the affected team members, and provides a stronger foundation for shareholder disclosure.
– Clearly explain the business rationale. Compensation Discussion and Analysis (CD&A) disclosure should explain how security and aircraft benefits relate to the executive’s role, visibility, travel requirements, threat environment, and broader company risk management. This framing helps distinguish the program from a purely personal perquisite.
– Evaluate tax gross-ups carefully. Committees should deliberate about whether to provide tax gross-ups on security and aircraft benefits, particularly because proxy advisors and most investors generally view gross-ups unfavorably. Where gross-ups are provided, the rationale should be clearly disclosed and tied to the company’s broader program objectives.
– Reassess coverage beyond the CEO. Given the increasing prevalence of programs covering other NEOs, based on the findings from the security assessment, Committees may want to evaluate whether certain non-CEO executives also face elevated risk due to their role, public profile, business responsibilities, travel patterns, or visibility on sensitive company matters.
– Align disclosure with governance. Companies that pair a well-governed, risk-based security program with clear, business-focused disclosure will be best positioned to protect executives while maintaining shareholder confidence.
We’ll be discussing personal security, perks, and of course the potential overhaul of the SEC’s executive compensation disclosure rules, and how companies may want to respond to those changes and the updates to filer status rules (if/when we have final rules on these topics), at our Proxy Disclosure & Executive Compensation Conferences. We’ll be posting over 200(!) pages of course materials containing practical nuggets and real-life examples from our conference speakers to our conference platform in the weeks leading up to the conferences. Conference attendees get exclusive access to these course materials. It’s worth registering for the conference just for these alone!
You can register online or by contacting us at info@CCRcorp.com or 1-800-737-1271. Make sure to book your hotel room soon too because the block is filling up quickly!
Maybe you were busy last week and missed it: The SEC’s proposal on executive compensation disclosure reform is in the queue on the OIRA dashboard! Here’s what Dave shared on Friday on TheCorporateCounsel.net:
The White House’s Office of Information and Regulatory Affairs (OIRA) updated its dashboard this week to note that the SEC has submitted a rule proposal titled “Executive Compensation Disclosure Reform,” signaling that the Commission will consider this rulemaking in the near-term. The Goodwin Public Company Advisory blog notes:
On August 26, 2026, the SEC submitted a rule proposal titled “Executive Compensation Disclosure Reform” to the White House’s Office of Information and Regulatory Affairs (OIRA). Those SEC rulemaking initiatives that are under review by OIRA are listed on a dashboard until the review is completed.
The SEC signaled that it was considering potential changes to the executive compensation disclosure rules by announcing a roundtable on executive compensation disclosure requirements on May 16, 2025. The roundtable was held on June 26, 2025, and the SEC also solicited comments on potential changes to the disclosure requirements. The agenda for the roundtable called for three panels to discuss the evolution of executive compensation disclosure over time and to explore whether the rules have achieved their policy objectives, the challenges in preparing the required disclosure, the types of disclosure that investors find material, and what the disclosure requirements should look like in the future.
A consistent theme throughout the roundtable was the complexity of the compensation tables and the required methodologies for reporting the required information. During the roundtable, the panelists addressed the concept of materiality, including whether executive compensation information is material to investors. Some of the panelists at the roundtable advocated for a move to principles-based disclosure requirements, while others indicated certain prescriptive disclosure requirements may be necessary. The panelists discussed the challenges with perquisites, including the need to disclose personal security for executives as a perquisite. Several panelists noted the significant difficulties that companies encounter with the executive compensation requirements adopted pursuant to the Dodd-Frank Act, including the pay versus performance disclosure requirements, the mandatory clawback requirements and the CEO pay ratio disclosure requirements. Approximately 70 substantive comment letters and over 1,000 form comment letters were submitted in response to the SEC’s solicitation of comment.
While OIRA has up to 90 days to review an agency’s rulemaking, it has typically approved most SEC proposals in a much shorter period of time. Once the rulemaking has been cleared by OIRA, the Commission could schedule or an open meeting to vote on the proposal or approve it by a seriatim process without the need for an open meeting.
But wait, there’s more! After Dave posted the blog on Friday, two more entries appeared on the dashboard, signaling proposals to rescind Rule 14a-8 for shareholder proposals and modernize the proxy solicitation process to reduce costs and compliance burdens. Check out John’s blog today on TheCorporateCounsel.net for more on those.
As John noted, like the executive comp proposal, these two proposals appeared on the latest edition of the SEC’s Reg Flex Agenda and targeted an October 2026 date for their release. It looks like the SEC’s on track to hit that date, and we’ll be ready to address any proposals that are issued during our Proxy Disclosure and Executive Compensation Conferences to be held on October 12th and 13th in Orlando. In case you needed another reason to register now, the SEC just gave you three!
It is certainly shaping up to be a busy fall for the SEC and all of us who might be involved with commenting on the rules. While these topics appeared in quick succession on the OIRA dashboard, we don’t know for sure when we’ll see the proposals – let alone the final rules – but we get the impression folks are motivated to keep moving everything along and companies need to be thinking ahead about their gameplans under the new frameworks. For those who may already be getting nostalgic for “what was,” check out Dave’s blogs about his time on the Staff handling shareholder proposals and the SEC’s executive compensation disclosure rules.
Liz recently shared Dragon GC’s third annual report on shareholder engagement responses to adverse Say-on-Pay votes, which summarizes the results of its analysis of engagements conducted and disclosed by 14 Fortune 1000 companies that had sub-optimal Say-on-Pay outcomes during the 2025–2026 annual meeting season. As she noted, this report shares real-world examples for six types of responsiveness disclosures it identified in its review. Here are some things that stood out to me from the examples:
– The companies’ engagement strategies were tailored to their circumstances. Some companies disclosed broad, board-involved outreach focused on identifying concerns; some companies have such robust recurring programs that they relied on those rather than a single post-vote outreach effort; and others could specifically structure their engagement around the specific compensation concerns that had already surfaced.
– As usual, responses to investor feedback varied widely and included:
Reducing target annual awards
Exercising negative discretion
Committing to no above-target or one-time awards in a year
Adopting a policy not to grant front-loaded or off-cycle awards, except in limited circumstances
Revising the mechanics of incentive programs
Replacing metrics
Increasing the proportion of compensation that is performance-based
– Some of the responsiveness disclosures touted governance reforms, which don’t necessarily come to mind when we think about responding to low Say-on-Pay votes. One company appointed a new chair of its compensation committee, added two members and conducted an RFP process that resulted in it retaining a new independent compensation consultant.
– Some companies disclosed that their compensation committees determined that no program changes were warranted, but they beefed up their disclosure regarding certain arrangements, metrics or decision-making processes where it seemed that expanded or revised disclosure could improve investors’ understanding.
For those interested in thorough or unique responsiveness disclosures, I’d encourage you to follow Mark Borges’s Proxy Disclosure Blog, where he shares interesting disclosures on many topics, including responsiveness, like this engagement and responsiveness disclosure provided by a smaller reporting company.
Liz recently blogged about how the potential expansion of scaled disclosure eligibility is likely to mean more companies will be making more judgment calls about what to include in their proxy statements on a voluntary basis. Even for companies that don’t hold a say-on-pay vote, proxy statements remain a valuable communication tool, and some disclosures that may become voluntary provide helpful context for why boards and compensation committees made the decisions they made. Plus, companies that remove any disclosures investors want to see may face backlash.
Liz and I recently chatted about the importance of waiting for the final rules to understand the regulatory impact of any decision to provide voluntary disclosures. That’s because the proposed rule changes contemplate eliminating Item 10(f) of Regulation S-K, which is focused on smaller reporting companies (a category the release proposes to eliminate), but is also where the rules provide that scaling decisions be made on an item-by-item basis. In the talking points submitted for the course materials for our fall Proxy Disclosure & Executive Compensation Conferences, Cooley’s Brad Goldberg notes:
The Society for Corporate Governance comment letter asked the SEC to clarify in the final rule that “a-la-carte” voluntary disclosure will still be permitted and to further clarify that voluntary disclosure will not be limited to an item-by-item basis (i.e., a company could choose to include a CD&A and all compensation tables but omit pay ratio disclosure).
As Brad’s examples suggest, the ability to elect between scaled and non-scaled requirements within an item (so long as, as the Society comment letter notes, the disclosure, at a minimum, satisfies the scaled requirements of that item) would be particularly helpful for Item 402, which has so many subsections it’s almost to the end of the alphabet.
Depending on how this shakes out in the final rules, new “non-accelerated filers” may have the opportunity to decide which parts of Item 402 to omit or maintain, both to tell their compensation story and to satisfy investor preferences. In that case, understanding your investors’ disclosure preferences will be key. Though future engagement may be advisable, investor comment letters on the filer status proposal may help you understand which disclosures certain investors consider essential. This Pay Governance alert says:
One of the clearest messages from both EGC and Roundtable letters was that investor respondents generally support simplifying executive compensation disclosure but not eliminating disclosure.
…ICI stressed the importance of not eliminating the CD&A from all NAFs, as this information “provides transparency and enables investors to understand and evaluate the potential effects of executive compensation arrangements on a company’s stock price”.
This issue is only one of the practical implementation questions our speakers will be discussing at our Proxy Disclosure & Executive Compensation Conferences. We’ll be posting over 200(!) pages of course materials containing practical nuggets and real-life examples from our conference speakers to our conference platform in the weeks leading up to the conferences. Conference attendees get exclusive access to these course materials. It’s worth registering for the conference just for these alone!
You can register online or by contacting us at info@CCRcorp.com or 1-800-737-1271. Make sure to book your hotel room soon too because the block is filling up quickly!
With ISS’s latest policy updates loosening the proxy advisor’s preference for at least 50% of LTI in PSUs as long as time-based equity meets its long-term parameters, this Semler Brossy article says some companies are considering taking advantage of that flexibility. There’s the old adage “if it ain’t broke, don’t fix it,” but for some companies, maybe the old ways are broken. The article says companies aren’t just considering a change to make a change, but to address some challenges they’re facing that may actually be making their PSUs less effective.
One of investors’ perceived issues with PSUs is the challenge of setting accurate multi-year performance goals, especially amid today’s sustained macroeconomic and geopolitical volatility. When the future is murky or rapidly changing, multi-year goal setting can be particularly difficult for some companies.
In addition, not all situations lend themselves to longterm goal-setting, even if volatility subsides. High-growth and/or cutting-edge companies may also face difficulties forecasting three-year financial targets with accuracy.
Similarly, companies undergoing significant investment phases that will impact specific financial metrics, or those expecting downward revision to financial performance, may struggle to set goals that remain meaningful throughout performance periods.
Finally, overly rigorous goal setting can also introduce retention risks. Compensation committees find themselves walking a precarious line between setting challenging yet achievable goals. Miss the mark with overly aggressive targets, and executives face low holdings and realized pay, potentially dampening motivation and causing unwanted attrition. Set goals too conservatively, and companies face “over payouts” that draw criticism from proxy advisors and shareholders.
Semler Brossy suggests that compensation committees ask themselves:
Do standard financial goals best capture our company’s strategic priorities?
Do performance-based metrics encourage the behavior we want from our leadership team?
Does a focus on 3-year performance goals directly align with our business cycles?
If a change is appropriate, the article addresses some options, including some tried-and-true methods like relative metrics and shorter performance periods, but also increasing the weighting of RSUs or options:
Increased RSU or options weighting to create more modest PSU mixes (such as 25% rather than 50% of the equity grant) can reduce overreliance on PSUs while maintaining some performance-based component. Replacing PSUs with a lower, equivalent value of RSUs can even reduce pay relative to peers while improving pay delivery certainty—a combination that may resonate with both executives and shareholders concerned about pay levels. [. . .] [C]ompanies can merge this approach with longer vesting to further enhance the long-term alignment with shareholders.
Just because ISS has softened its policy on PSUs doesn’t mean that companies making a change won’t face a challenging say-on-pay season. Telling your story will continue to be critical.
This is just one of the timely topics that will be discussed during the panel “The Top Compensation Consultants Speak” at our Proxy Disclosure & Executive Compensation Conferences on October 12 – 13 in person in Orlando and virtually streamed. Semler Brossy’s Blair Jones will be addressing evolving conversations around equity design, including when PSUs work well, when they don’t and when to consider a new design – plus long-vested RSUs and other alternatives to traditional PSUs.
Don’t miss these critical conversations! Sign up for our 2026 Proxy Disclosure Conference and 23rd Annual Executive Compensation Conference today. Register online or contact us at info@CCRcorp.com or 1-800-737-1271.
Compensia’s Mark Borges, who has been blogging up a storm about clawback disclosures on his members-only Proxy Disclosure Blog here on CompensationStandards.com, recently wrote a summary of his survey of Dodd-Frank compensation disclosures that have been included in annual reports or proxy statements pursuant to Item 402(w) of Regulation S-K. Here are some of Mark’s findings:
– 118 companies reported on the results of their compensation recovery analyses, with 19 companies disclosing that those analyses required clawbacks.
– The aggregate amount recovered to date is $9.8 million.
– Recoveries have ranged from $2,900 to $3.8 million, with an average of $561,000 and a median of $193,000.
– Recovery methods for bonuses have included repaying in cash a bonus already paid or earned, or reducing or canceling earned amounts. For equity, recovery methods have varied, with companies canceling future share issuances, reducing issued shares, requiring a cash repayment of value or returning unearned shares.
– Two companies have waived repayment, with one citing the impracticability exception and one disclosing that it was unable to contact former executives.
In the memo, Mark shares more detail on the recovery approaches used to date and the challenges that come with each.
We’ve noted that more companies are seeing strong say-on-pay support this year. This FW Cook memo gives stats as of July 1st and notes that lower support seems to correlate with large “special awards”:
The 2026 say-on-pay season produced stronger results for most S&P 500 companies. Nearly 75% received at least 90% shareholder support, up from 70% in 2025, while the share below 70% declined
from about 6% to 5%.
The low-support group became smaller in 2026, but the remaining weakness was more concentrated. Large special awards appeared in half of the 22 cases below 70% support, and all five failed votes involved an outsized equity grant.
Among widely held companies receiving an adverse ISS recommendation, support topped out in the mid-70s and averaged 56.9%, lower than in any pre-pandemic year in the period reviewed. Much of that weakness was concentrated among companies with large one-time awards.
The obvious conclusion to draw is that companies that make large off-cycle awards are at greater risk of a low say-on-pay vote – by which I mean falling below the magic threshold of 70-80% that triggers heightened scrutiny of “responsiveness” in the following year. As the FW Cook memo notes, even awards that are performance-based can trigger a negative vote if they are large, the goals aren’t fully disclosed and/or the grant is in addition to the typical grant-cycle awards. Say-on-pay support may rebound in the following year if the company can show a return to its regular award program.
But reading between the lines, some companies come up short for reasons other than a large special award. That’s one reason why “responsiveness” disclosure may go beyond a commitment to avoid outsized grants (another reason is that companies may try to track what proxy advisors and investors say they want to see for “responsiveness” – e.g., ISS Exec Comp Policies FAQ 11). For real world examples, this report from Dragon GC looks at how companies disclosed “responsiveness” in the year following an adverse outcome. The report groups responsiveness disclosures into six categories and gives examples for each:
1. Engagement Strategy – Broad and Direct Engagement; Structured and Recurring Engagement; Targeted and Topic-Specific Outreach
2. Response to Feedback on Executive Compensation – Pay Reductions and Lower Award Opportunities; Restrictions on Special, One-Time and Front-Loaded Awards
3. Incentive Plan and Equity Structure – Incentive Plan and Performance-Metric Redesign; Increased Performance-Based Pay and Equity Alignment
4. Governance and Policy Reforms – Stronger Compensation Governance and Risk Controls; Compensation Committee, Board and Adviser Enhancements
5. Enhanced Transparency and Disclosure Improvements – Detailed Compensation Reporting and Proxy Enhancements
6. Retention of Core Compensation Programs – No Substantive or Minimal Program Changes
I blogged yesterday about FASB ASU 2024-03, which will soon require public companies to include “employee compensation” and other disaggregated expense data in the notes to financials. This CLS Blue Sky blog from several b-school profs (based on their paper here) looks at how investors could use labor costs in particular to predict a company’s future performance, while noting that the required info still may not paint a full picture for analysts. Here’s an excerpt:
Measuring labor costs is hard precisely because firms do not disclose them. We use data from Revelio Labs, which standardizes millions of public employment records to estimate firm-level compensation, to build wage measures for roughly 25,000 firm-years from 2009 to 2022. The data let us split labor into three functional categories, general and administrative (G&A), sales and marketing (S&M), and research and development (R&D), a detail that no mandated financial-statement data currently provide. We validate our wage estimates against three benchmarks: voluntarily disclosed staff expense, median employee pay from proxy statements, and an industry-imputed wage measure based on voluntary disclosures. We caution that the Revelio measures are estimates, not audited figures, and are subject to selection and measurement error. Both sources of noise bias our tests toward finding smaller effects, so our estimates should be read as a conservative floor on the usefulness of audited labor-cost information.
Our first finding is that detail matters, and the useful detail is functional. Separating SG&A into aggregate wage and nonwage components yields only modest gains in predicting future performance. The larger gains arise when wages are split by function. The three components behave in economically distinct and intuitive ways: S&M wages track near-term revenue growth, R&D wages are the most informative about long-horizon revenue growth and future SG&A intensity, and G&A wages are comparatively uninformative about future fundamentals. These patterns persist when we control for the matched nonwage expense within each function, so labor is carrying information that nonlabor costs do not. Additionally, the gains are largest among firms with smaller workforces, where hiring choices map more directly onto commercialization and innovation.
The information also has capital-market consequences. Periods of high wage volatility, particularly in G&A and R&D wages, are associated with larger analyst revenue-forecast errors and with greater market illiquidity. Firms that voluntarily disclose aggregate wages attenuate some of the G&A-related uncertainty, but the effect is imprecise and does not fully resolve the forecasting errors or liquidity costs tied to more forward-looking inputs such as R&D. Taken together, the evidence is consistent with labor-cost disaggregation providing information that analysts and investors do not already have, and the usefulness of both aggregate and disaggregated labor costs.
What does this mean for the standard? The companies’ empirical premise does not hold up: Labor-cost information is useful, and the market prices its absence. More important, our evidence cuts in a second direction that the debate has largely missed. The standard requires compensation to be disclosed within the functional captions firms already present, but it does not require firms to separate R&D, S&M, and G&A on the face of the income statement, meaning that the labor-cost disaggregation our results find most useful may not be disclosed. Because the largest predictive gains come precisely from splitting labor functionally, a rule that stops at compensation-within-existing-captions is a step forward, but it can be improved by requiring firms to report R&D, S&M, and G&A in the income statement.
The professors acknowledge that they’re only considering the “investor benefit” side of the ledger here – not diving into how costly it will be for companies to collect and disclose the information. They note that a complete cost-benefit verdict will have to wait until the standard has been in force for several years.
