August 17, 2021
Say-on-Pay: Big Companies Are Facing More Scrutiny
The latest Semler Brossy recap of say-on-pay results says that results this year are a mixed bag. From a trend perspective, S&P 500 companies seem to have more to worry about than the Russell 3000, with a higher failure rate and lower voting averages overall. Here’s more detail (also see this Semler Brossy memo, for further analysis of the extra scrutiny of big companies):
– Failure rates are leveling out from what we saw earlier in the season, and it appears that most failures were due to Covid-related pay actions
– The current failure rate (2.8%) remains above the failure rate at this time last year (2.2%) and is slightly lower than our June 24th report (2.9%)
– The percentage of Russell 3000 companies receiving greater than 90% support (76%) is greater than the percentage at this time last year (73%)
– The current average vote results of 90.5% for the Russell 3000 and 88.7% for the S&P 500 are below the average vote results at this time last year
– The average vote results for the S&P 500 reflect an acceleration of a 4-year decline in average approval rates
– The average Russell 3000 vote result thus far is 180 basis points higher than the average S&P 500 vote result, which is 80 basis points larger than the spread at this time last year
Should companies be worried about say-on-pay failures heading into next year, or was 2021 an anomaly? If you’re a company that received a lower than normal vote this year, what do you need to do to bounce back? We’ll be talking about these issues (and many more) at our “Proxy Disclosure & Executive Compensation Conferences” – coming up virtually October 13th – 15th. Check out the agenda – and register today to get the info you need. Members of our sites get a discounted rate!
– Liz Dunshee