FW Cook has just released a very detailed report on executive perks reported by S&P 100 companies for 2021 to 2024. Not surprisingly, the most common perks are personal use of corporate aircraft and security services — and data on those two perks dominates the report as well.
Aircraft: The prevalence of personal use of the corporate aircraft has slightly increased in the past three years. Roughly two-thirds of the S&P 100 companies that provide corporate aircraft also require their CEO to use it for all personal travel.
The median reported value for personal use of aircraft increased from $129K in 2021 to $210K in 2024. About 20% of the companies with an aircraft perquisite disclosed an annual limit on personal travel, typically defined as a maximum dollar value rather than a maximum number of flight hours, with a median limit of $250K per year.
Security: The prevalence of personal and residential security perquisite increased from 38% in 2021 to 59% in 2024. The median reported value for personal and/or residential security increased from $75K in 2021 to $111K in 2024.
While median spending on executive security benefits grew modestly from 2021 to 2024, the cost of these benefits increased significantly at the 75th percentile, climbing from $348K in 2021 to $784K in 2024. The wide variation in spending often depends on the level of protection provided. Lower costs typically cover only residential security systems, while the highest costs include comprehensive protection including secure transportation, armed drivers, and personal security details.
The report also delves into company-provided vehicles or personal drivers, charitable gifts, club memberships, executive physicals, financial planning or tax prep services, perk allowances, life insurance and long-term disability.
Perks are on the agenda of multiple panels at our “Proxy Disclosure and 22nd Annual Executive Compensation Conferences” that start tomorrow! There’s still time to register to attend — including to “attend” from the comfort of your home or office. Just email us at info@ccrcorp.com, call us at 800-737-1271, or visit our online store.
If you’re attending in person, we’ll see you beginning at 4 pm Pacific today in the Primrose Hallway at The Virgin Hotels for a casual evening reception celebrating CCRcorp’s 50th anniversary.
The SEC’s pay versus performance rule is one that most companies love to hate – the sentiment that it was created “by economists, for economists” rings true for a lot of us. While the info might be unwieldy and arguably not material to investors, this blog from Stephen O’Byrne of Shareholder Value Advisors points out that companies themselves may have the most to gain from the disclosures.
In short, with the SEC’s standardized format and requirement for both absolute and peer-relative performance comparisons, companies now possess a new dataset: their own long-term compensation and performance history, presented in a way that can be compared with peers. Stephen’s blog walks through how compensation committees could use the data to make pay programs more effective at motivating and retaining executives. A recent paper from Stephen explains what that looks like:
The conventional wisdom in U.S. executive pay is that maintaining a target pay percentile with a high percent of pay at risk achieves the three basic objectives of executive pay. Not letting target pay fall below the median retains key talent, not letting target pay rise above the median limits shareholder cost and a high percent of pay at risk ensures a strong incentive.
The new Pay Versus Performance (PvP) data provides the data – “mark to market” pay – to test the conventional wisdom. Individual company regressions relating relative mark to market pay to relative TSR quantify incentive strength (slope), alignment (correlation) and performance adjusted cost (the intercept). These regressions show that the conventional wisdom only works for about 15% of companies.
To help understand the weaknesses of the conventional wisdom, I show that that there is a simple pay plan with annual grants of performance shares that provides a perfect correlation of relative pay and relative TSR and that this perfect correlation pay plan differs from conventional practice in two ways. First, it says that target pay should be market pay adjusted for trailing relative performance, not market pay regardless of past performance. Second, it says that vesting should take out the industry component of the stock return, not use company performance to leverage industry performance as plans with relative TSR vesting do.
The perfect correlation plan shows that mark to market pay should be equal to the expected future value of cumulative market pay plus a fixed and symmetric share of the excess return. It shows how to improve executive pay by combining fixed sharing – the guiding concept of executive pay before World War II – with competitive pay levels – the guiding concept of executive pay since World War II.
Stephen has a couple otherblogs that further explain how to use PvP data. This recent Pay Governance memo also defends the usefulness of “compensation actually paid.”
As Pay Governance noted in its memo – and as we’ve shared on thisblog – many comment letters submitted in response to the SEC’s Executive Compensation Roundtable earlier this year suggested ways to improve – or eliminate – mandated PvP disclosures. Getting an edge in performance means a lot these days (probably even more than a favorable “say-on-pay” vote). Companies that want to use PvP data to help incentivize and retain executives may want to make the most of it while it’s still here.
Now’s the time for compensation committees to lay the groundwork for annual compensation reviews and decisions. This FW Cook blog explains why analyzing the “holding power” of outstanding equity awards should be part of that:
Absent “perfect” succession planning, the loss of key talent is at best distracting and at worst disruptive to business operations. While no Committee can guarantee with absolute certainty that leaders will not be poached, periodically reviewing Holding Power enables proactive, informed decisions instead of reactive and costlier ones down the line. And unless managed carefully, costs incurred to onboard a replacement may prompt scrutiny from investors and proxy advisors, place undue pressure on equity budgets (absent use of inducement-plan shares), and create internal tension if remaining executives do not fully appreciate the dollars spent to entice a new hire. For these reasons, a review of Holding Power multiples is a prudent component of the annual compensation planning cycle and supports good governance.
Looking at S&P data as of September 30th, FW Cook found that CEOs have the highest proportion of at-risk unvested equity compensation. The median multiple is 2.2x target Total Direct Compensation – but the blog points out that each company should take a more nuanced approach to its own figures:
More meaningful comparisons of Holding Power come from benchmarking against executive compensation peer groups, since the output is sensitive to several factors: market and company performance (with higher returns and above-target payout estimates boosting Holding Power), the size and mix of equity awards (often correlated to market capitalization), and specific industry practices. For instance, high-growth sectors such as technology and life sciences generally rely more heavily on equity compensation and stock options, which offer additional leverage and potential for greater multiples when share prices rise. Because of these dynamics, Holding Power is best interpreted relative to target TDC and through the lens of peers facing similar market and industry conditions.
Below-median multiples should not be viewed as an automatic red flag; factors like short tenure or recent promotion can naturally depress an executive’s unvested holdings. Instead, treat the data as a guidepost that indicates whether an executive’s Holding Power appears below, in-line, or above market norms, and discuss whether action is warranted. While high unvested holdings do not guarantee retention, periodic reviews can help Committees lessen the risk of unforeseen and costly departures.
In the blog, FW Cook points out that it focused on unvested equity for its S&P 500 analysis, but when you do this in practice, forfeitable long-term cash awards can also be part of the calculation. Members of this site can visit our “Determining How Much Pay is Appropriate” Practice Area to access other resources on setting executive pay and designing awards.
If you haven’t registered, time is running out! The Conferences are happening next Tuesday & Wednesday – October 21st & 22nd. Register online or by emailing info@ccrcorp.com or calling 1.800.737.1271.
Way back in January – which is when we started planning this year’s “Proxy Disclosure & 22nd Annual Executive Compensation Conferences” – we knew that we’d have some big things to discuss by the time they rolled around. But the degree of change and uncertainty we’re dealing with right now is even more than we bargained for! Next week, we’ll be convening at The Virgin Hotel in Las Vegas – and out of all the bets in Vegas, the safest one is that everyone at the Conferences is going to benefit from real-time info about what’s happening. Here are a few late-breaking topics that we’ll touch on during our fast-moving agenda:
1. What the government shutdown means for public companies and proxy season
2. The potential overhaul of executive compensation disclosure as we know it
3. A paradigm shift for Rule 14a-8 shareholder proposals
4. Changes to the shareholder voting & engagement landscape
5. Hot topics for boards
6. “DExit” and other state law developments
7. How director elections are changing
8. And more!
As year-end and proxy season approach, the best way to prepare for these changes – and stay sane – is to gather together & hear from the best in the biz. Whether you’re attending the “Proxy Disclosure & 22nd Annual Executive Compensation Conferences” virtually or in person in Vegas, know that you’ll walk away with practical tips. If you haven’t registered, time is running out! The Conferences are happening next Tuesday & Wednesday – October 21st & 22nd. Register online or by emailing info@ccrcorp.com or calling 1.800.737.1271.
If you’ve already registered, whether that’s in-person or virtual, you can now join the event platform! That’s where you’ll find the helpful course materials and much more! Here’s more info on how to access the platform.
We hope many of you join us in person in Las Vegas for our Proxy Disclosure & Executive Compensation Conferences — in less than two weeks! Whether you join us in person or virtually, I promise you’ll come away with loads of valuable insights & practical takeaways you can apply in your practice immediately. Our two days of content will feature 15 panels and nearly 50 seasoned proxy experts and corporate practitioners discussing the latest developments, tested strategies and emerging trends in our industry to help you navigate an uncertain environment and tackle the 2026 proxy season head-on.
As a “sneak peek” for our blog subscribers who are attending, we will be posting our “Course Materials” containing over 200(!) pages of practical nuggets to our conference platform this week! Our course materials are full of originally crafted practical bullets & real-life examples from our expert speakers — not just rule releases & old memos. If you haven’t registered for our conferences, we’ve posted the detailed panel agendas so you can see all the specific topics each panel will tackle.
Wednesday’s panel “The SEC All-Stars: Executive Pay Nuggets” featuring speakers with decades of experience and knowledge of the inner workings of the Commission will be addressing what’s new and what’s on the horizon for SEC guidance and rulemaking and current hot topics – including executive security, insider trading policies, CEO transitions and navigating volatility in your executive compensation program.
Don’t miss it! You can sign up online – or contact our team by email at info@ccrcorp.com or by phone at 1.800.737.1271.
If you’re attending in person, join us on Monday, October 20th, from 4:00 to 7:00 pm PT for a casual reception celebrating CCRcorp’s 50th anniversary and offering you an opportunity to network with your fellow attendees, sponsors, exhibitors and our CCRcorp team!
The Jasper Street Partners September insight (subscribe for the full version!) shares some details about say-on-pay support this year, highlighting nuances within the overall positive trend.
Among the largest investors, BlackRock recorded notably higher support levels than previous years, and Vanguard and SSIM again supported 95+%.
At the same time, support among many large active managers – including Fidelity, Capital, Invesco, Franklin, Wellington and Nuveen – has declined.
Jasper Street is seeing many active managers vote differently than the “default” recommendation by their firm’s proxy voting team — which can either help or hurt companies.
Investor concerns that go unaddressed can fester and have more meaningful consequences. This is particularly the case if the “against” vote was driven by the firm’s portfolio managers.
Even with 80%+ support levels, it says companies cannot afford to ignore ‘against’ votes from large shareholders.
This Troutman Pepper Locke alert describes some more compensation considerations from the One Big Beautiful Bill Act (OBBBA) — with a focus on changes to Sections 162(m) and 4960. The memo first level sets on the pre-OBBBA status of 162(m):
Section 162(m) limits the federal income tax deduction that a publicly held corporation may claim for compensation paid to any “covered employee” to $1 million per year. Covered employees include the principal executive officer, principal financial officer, and the three other highest compensated executive officers of the publicly held corporation. For years after 2026, covered employees also include the next five highest compensated employees, whether or not executive officers (the “five highest paid employees”). Anyone who was a covered employee for a year beginning after December 31, 2016, remains a covered employee for all future years, even after termination of employment (the “once covered, always covered” rule). However, the once covered, always covered rule does not apply to the five highest paid employees.
The section 162(m) limit applies to all compensation, including salary, bonuses, equity awards, and other taxable remuneration, regardless of whether the compensation is performance-based. IRS regulations require the deduction limit to apply to all compensation paid by the corporation and any members of its “affiliated group” as determined under section 1504 (excluding the provisions of section 1504(b)), and the disallowed deduction is prorated among payors.
It then continues with this discussion of OBBBA changes:
For tax years beginning after December 31, 2025, OBBBA requires the section 162(m) deduction limit to apply to a publicly held corporation and all members of that corporation’s “controlled group” under sections 414(b), (c), (m), and (o), instead of the “affiliated group” under section 1504 as currently required by the section 162(m) regulations. This change means that publicly held corporations must consider compensation paid to employees by all members of the controlled group, both for identifying the covered employees and for determining the amount of compensation received by those covered employees subject to the section 162(m) deduction limit.
While “controlled group” and “affiliated group” are both “used to aggregate related entities for various federal tax purposes,” they “have distinct definitions, requirements, and applications” with “controlled group” being the broader concept.
Practically, the memo says this change may especially hit “UPREIT” and “Up-C” business structures. That’s because the primary impact will be for public companies with partnerships or other noncorporate entities in their controlled group that were not in their affiliate group, and only to the extent those entities pay compensation to employees. Since Section 162(m) doesn’t “present any significant tax planning or mitigation opportunities,” the main task here is to look out for additional guidance and then make sure you identify the correct controlled group for the 2026 tax year.
This Meridian memo really grabs your attention right from the get-go.
In a merger and acquisition environment where scrutiny is high and single change-in-control (CIC) provisions can lead to an “Against” recommendation from proxy advisors, outdated “golden parachute” arrangements can quickly become a distraction, or worse, a liability.
It continues with tips so your CIC protections align with shareholder expectations and make executives economically neutral about a potential transaction.
1. Keep Severance Multiples in Check
2. Double-Trigger Equity is the Standard
3. Clarify “Cause” and “Good Reason” Definitions
4. Eliminate 280G Tax Gross-Ups
5. Be Transparent About Legacy Agreements
Here’s additional detail from the alert on the third point above:
Modernizing CIC arrangements is not just about quantum or structure—it’s also about language. There are examples of legacy agreements that include vague or broad employment termination definitions of “cause” and “good reason,” which can lead to disputes, unintended payouts or unfavorable governance optics.
Today, approximately 70–80% of companies rely on standardized CIC agreements or severance plans rather than individualized employment agreements—a shift that creates a valuable opportunity to align and standardize key terms across participants.
To reduce risk and strengthen governance alignment, companies should consider reviewing and updating these definitions to reflect objective, clear and market-aligned definitions.
I blogged yesterday about modest increases to compensation for public company directors over the past decade. That hasn’t been the case for their private company counterparts – who saw an average 25% increase last year, according to this survey from Private Company Director and Compensation Advisory Partners. Here’s more detail:
As private company board governance continues to evolve, the complexity and time commitment associated with board service has increased. The additional workload, coupled with greater competition to recruit qualified candidates, has caused private companies to increase pay levels and provide pay structures, such as annual retainers and long-term incentives, that are similar to public companies.
The 2025 Private Company Board Compensation and Governance Survey includes a robust dataset of 633 respondents who certified their data in April 2025 and provides an up-to-date analysis of director pay practices in the current competitive environment. About half of the survey respondents represent family-owned or -controlled companies. Another 17% of respondents represent closely held companies, 18% represent private equity-owned companies and 10% represent companies owned by employee stock ownership plans (ESOPs). The survey respondents span diverse industries and a broad range of revenue sizes.
The survey found that annual cash retainers are very common and that 37% of companies provide long-term incentives (mostly in the form of equity). Board compensation for private company directors is still lower than public company pay. But compared to the public company director compensation trends that I shared yesterday, it correlates more closely with company size.
If you think directors at large-cap public companies are bringing home a lot more in board compensation than their counterparts at smaller companies, you’d be wrong, according to FW Cook’s annual review of director compensation. The report summarizes trends at 300 companies of various sizes and industries. Here were a few key findings:
– Annual director compensation growth remains modest, particularly for mid- and large-cap companies.
– This trend goes back further than the three-year look on the prior page – looking across our last 10 studies, annualized growth in median total pay has been 2.9% for mid-cap companies and 2.2% for large-cap (4.9% for small-cap).
– Over the last 10 years, director pay has not kept pace with the increase in market value of companies. This is especially true for large-cap companies where, over this period, the median market cap rose 305% (11.8% annually) while median director pay rose 25% (2.2% annually).
– Large-cap companies, which in this study have a median market cap of >50x the small-cap median, pay directors roughly 1.5x what small-cap companies pay, compared to a multiple of 2.7x for CEOs.
FW Cook says that compression at the top of the pay scale is a problem for large companies looking to attract qualified directors and points out how this compression differs from what we see with CEO pay as companies grow.
While I can see that point, I’m taking it with a grain of salt. In my experience, high quality directors are more motivated by intrinsic rewards like reputation, connection, and staying relevant than money. I’ve heard recruiters and board chairs say it’s a red flag if the compensation is what’s attracting the candidate. Plus, with 60-70% of director pay coming in the form of equity that will continue to appreciate, board members at well performing large-cap companies aren’t exactly working for free.
The memo also has this to say about pay caps for directors:
– Prevalence of annual limits on director compensation continues to increase (82% of the total sample versus 79% last year and 67% five years ago).
– Limits on total pay typically range from $500,000 to $1,000,000 and equate to a multiple of roughly 2x to 3x total director pay.
Part of the reason that annual pay limits have become more common is because the Delaware Supreme Court decided several years ago that the entire fairness standard applies to the board’s director compensation decisions. I’ve shared commentary in the past about considering conflicts of interest in setting director pay – and those could be more of an issue if board compensation starts to track CEO pay patterns.