The Advisors' Blog

This blog features wisdom from respected compensation consultants and lawyers

February 5, 2019

Shareholder Proposals on Pay Ratio: How to Respond

Liz Dunshee

Broc’s blogged a couple of times about shareholder proposal campaigns that pressure companies to disclose more info on workforce compensation practices relative to CEO pay – and related settlements. Broc noted that the agreements range from adding “human capital” disclosure, to enhancing workforce benefits, to committing to consider the CEO pay ratio when determining executive pay. This Willis Towers Watson blog takes a closer look at how companies have publicly responded to the shareholder proposals – and outlines things to consider. Here’s an excerpt:

There is no set playbook for how companies respond to shareholder proposals. Some responses are minimalist, while others provide a lot more information about how the company manages its workforce and recent steps taken to ensure pay equality across the workforce. Most piggybacked their responses to planned or completed activities to enhance workforce pay and benefits. It is noteworthy that only one company responded by affirmatively stating that their compensation committee would consider workforce pay levels in establishing CEO pay.

Three key considerations should frame your company’s disclosure:

– What to include
– Where to include it to clearly reflect your compensation committee’s mandate
– How you’ll tell your story so investors truly understand how your organization values its employees