July 3, 2018
Trends in “CYA” Pay Policies
– Liz Dunshee
This year’s “ClearBridge 100″ report notes that – possibly due to increasing scrutiny from shareholders & proxy advisors – almost all large companies have adopted clawback policies, stock ownership & post-vesting holding requirements and anti-hedging/pledging policies. In addition, only 7% of companies said they positioned target compensation above the 50th percentile – down from 24% in 2015. Here’s more detail:
– Most companies apply clawbacks to all aspects of incentive compensation
– For stock ownership guidelines, 75% of companies require a multiple of at least 6x salary for the CEO – up from 62% in 2015
– 59% of companies have post-vesting holding requirements – of those, 85% require executives to hold equity grants until stock ownership guidelines are met
– 97% of companies have an anti-hedging policy & 79% of companies have an anti-pledging policy – up from 71% in 2015