The Advisors' Blog

– Broc Romanek

We’ve added this excellent analysis from Sullivan & Cromwell to our batch of reports indicating how pay fared on the ballots this proxy season at annual meetings. The S&C piece covers say-on-pay and equity compensation plan approvals. Here’s the overview:

Continued strength on say-on-pay:

– Public companies continued to perform strongly on say-on-pay, with support levels averaging over 90% and less than 3% of companies receiving less-than-majority support.
– Fewer than half of the companies who received less-than-majority support last year achieved over 70% support this year, suggesting low say-on-pay votes have become stickier.
– ISS negative recommendations on say-on-pay highlight the continued importance of the pay-for-performance assessment category, with the most important factor continuing to be the alignment of CEO pay with Total Shareholder Return (or TSR) in relation to the ISS-determined peer group.
– The most important qualitative factor was performance standards that are not deemed sufficiently rigorous by ISS or clearly explained.

Broad shareholder support for equity compensation plans, with only two Russell 3000 companies failing to obtain shareholder approval for an equity compensation plan and overall support levels continuing to average around 90%.