August 10, 2020
COVID-Related Pay Decisions Will Dominate Next Year’s Proxy Season
– Liz Dunshee
Scrutiny of pandemic-related pay decisions is mounting, as mass layoffs and furloughs draw even more attention to the gap between executive pay and pay of the average worker. Last week, ISS released takeaways from its “2020 US Compensation Proxy Season Review.” Among the findings:
COVID-related compensation decisions expected to dominate next year’s proxy season landscape. As the pandemic arrived in the US during the 2020 compensation cycle, related changes will not be fully disclosed until the 2021 proxy season. Looking ahead, compensation topics in the 2021 proxy season are likely to be defined by mid-year adjustments to incentive programs and use of discretion or one-time awards.
That finding is emphasized by the AFL-CIO’s annual “Executive Paywatch” – which was updated last week and highlights 20 CEOs – primarily of retail companies – who furloughed a majority of their workers yet had a pay ratio of more than 1000 to 1. The unions suggest that CEO salary cuts were “symbolic” and, with base salary making up less than 10% of the average CEO’s total compensation, were more than offset by equity awards.
Although the ISS review found that the rate of say-on-pay failures decreased this year, it also found that median say-on-pay support levels dropped to the lowest level since mandatory voting began in 2011. That might foreshadow a trend as we head into next year and need to explain pandemic-related decisions.
We’ll be addressing these difficult issues at our “Proxy Disclosure & Executive Pay Conferences” – coming up virtually September 21st – 23rd. Register today to get the latest essential & practical guidance, direct from the experts. Here are the agendas – 15 panels over 3 days, plus interactive roundtables to discuss pressing topics.