The Advisors' Blog

– Broc Romanek

Here’s the intro of this blog by FW Cook’s George Paulin:

We recently presented an executive compensation program review to the board compensation committee of a successful, long-standing S&P 500 industrial company. The peer group had 20-or-so comparable companies. A primary conclusion was that after six years of say-on-pay and proxy advisor voting rules, both the pay levels and program structures in the peer group were never more alike.

In the discussion that followed, there was clear concern by committee members that the “one-size-fits-all” trend among peers (and more broadly) may be overlooking areas where differentiation could provide competitive advantage. This led us to ask whether our conclusion would be different if newer, innovative, high-growth companies were substituted for traditional peers.

We responded by comparing practices that were now generally shared by the traditional S&P 500 peers to five large companies widely recognized for growth and innovation in products, applications, and markets over the last decade: Apple, Amazon, Alphabet, Facebook, and Tesla. For simplicity and objectivity, we used proxy data covering the CEOs and other named executive officers (NEOs).