Towers Watson’s recently completed annual salary planning survey of 910 U.S. companies found that executives can expect fairly modest salary increases in 2014, generally consistent with the levels in recent years. The survey participants granted a 2.7% average annual increase to their executives this year. For 2014, projected salary budgets put the average executive pay increase at 2.9%.
The survey also found that top performers are likely to do far better than the average as companies continue their recent efforts to better differentiate rewards based on performance. Retaining top performers and scarce leadership talent remains a significant challenge for many companies, even with the overall softness in the labor markets.
Last week, I highlighted some of the comments that the SEC has received from investors. We are now up to 115,000 pay ratio comments overall, with many more posted from investors. Some comments continue to come in, even though we are a week past the December 2nd deadline.
So far, there are not too many comments submitted by companies – and some don’t provide specific cost data. I might have missed some – sometimes the comments are not labeled clearly – but my survey shows that only 5 out of the 20 comments submitted by companies provide cost data.
These are the ones I found that include cost data:
Recently, NYSE Governance Services, Corporate Board Member and Pay Governance collaborated to survey the opinions of compensation committee members over the state of executive pay. This report highlights the key findings and summary analysis from this study, which comprises 323 compensation committee member survey responses.
After my blog got pushed out a few days ago, I tweaked it to note that the form of certification that I linked to was merely just a preview of what Nasdaq will require. Nasdaq expects to release the final form in early January, which will be changed somewhat from the preview to accommodate the proposals that the Nasdaq filed last week, etc.
Also note that listed companies will not file a paper certification with Nasdaq – but rather will certify electronically through Nasdaq’s “Listing Center” website, similar to the process companies (and applicants) use to submit listing applications and forms such as this one…
Wow. The SEC has received over 105,000 pay ratio comments by its December 2nd deadline. Some interesting contributions, such as this joint letter from a bunch of Congress folks. And Sen. Menendez – the dude who inserted Section 953(b) into Dodd-Frank – got other Senators to sign onto his comment letter. In a cursory perusal, Dover Corp. is the only company I found to submit a comment letter with the math about its costs. Do you see others?
Here are some from institutional investors, most of which support the SEC’s rulemaking:
On November 26, 2013, the Nasdaq Stock Market filed a proposal to amend its listing rules implementing Rule 10C-1 of the Securities Exchange Act of 1934, governing the independence of compensation committee members. Currently, Nasdaq Listing Rule 5605(d)(2)(A) and IM-5605-6 employ a bright line test for independence that prohibits compensation committee members from accepting directly or indirectly any consulting, advisory or other compensatory fees from the company or any subsidiary subject to certain exceptions.
Based on the potential burden the bright line approach places on companies’ ability to recruit eligible directors, Nasdaq has proposed to replace this rule and its exceptions with a requirement that all compensation received from a company be considered in the independence determination. Separately, Nasdaq has also proposed some minor revisions to the affiliation prong of the compensation committee independence test under Rule 10C-1, which requires that consideration be given in independence determinations to whether a compensation committee member is affiliated with the issuer, a subsidiary of the issuer or an affiliate of a subsidiary of the issuer. All of these changes would align Nasdaq’s approach to compensation committee independence with that employed by the NYSE.
Yesterday, Mike Melbinger blogged a reminder that the Nasdaq has provided a preview of its form of certification (see pg. 16) for listed companies to use when it complies with Nasdaq Rule 5605(d) next year; the Nasdaq will be releasing the final form sometime in early January…
With the SEC’s proxy advisor roundtable coming up in a few days on December 5th, the SEC just announced the agenda & panelists – and the debate over the role of those firms is reaching a fever pitch. In this podcast, Sarah Wilson, CEO of the UK’s Manifest, weighs in on the debate over proxy advisor regulation, including:
– What is Manifest? What is the proxy advisor market like in Europe?
– How are proxy advisors regulated right now in Europe?
– What is the proposed global set of best practices for proxy advisors?
– What do you think of the criticism of proxy advisors in the US?