May 31, 2022
Human Capital Management Disclosure: Quantitative Metrics Gained Traction in Year 2
A recent Aon memo analyzed the evolution of human capital management disclosures among 103 filings from S&P 500 companies for the 2021 fiscal year – Year 2 of required disclosure. Below are some of the highlights:
– The most prevalent categories for HCM disclosure in 2021 were employment (quantitative) at 98%, talent development (qualitative) at 89%, and compensation & benefits (qualitative) at 83%.
– There’s still a lack of quantitative information in HCM disclosures generally. However, upon comparing year-over-year disclosures for 73 S&P 500 companies, companies are increasingly disclosing gender or race/ethnicity data, as well as quantitative data on employee geography and turnover data (though quantitative turnover data was still reported by less than 1/3rd of those companies).
– Just over half of the 103 companies disclosed both gender and race/ethnicity breakdowns of their workforce, and 41% had more comprehensive disclosure covering those quantitative diversity metrics with job type, career levels and other categories.
– Aon notes that there was a decrease in pay equity study disclosures – which may indicate that companies are acting on the 2020 pay equity audit results, instead of focusing on disclosures on the audits themselves.
Aon notes that “disclosing quantitative DEI factors by job type or career, discussing pay equity studies and addressing turnover” are getting traction, and companies can prepare by measuring these metrics & understanding the reasons behind company-specific trends. The article provides several other to-do actions on pg. 6, which includes considering revisions to your 2023 HCM disclosures now & building in time to review next year’s proposed disclosures with the committee responsible for human capital oversight.
Investors will continue to expect more from Human Capital disclosures going in to next proxy season – and another SEC proposal is still expected, too. There are step-by-step actions that you must take to keep approval ratings high for your comp committee. To arm yourself – and your board – with the info you need, register for our upcoming “Proxy Disclosure & Executive Compensation Conferences” – coming up virtually October 12-14. Among other critical topics, our agenda includes “Human Capital Disclosure – Mastering SEC & Investor Expectations” – with Aon’s Pam Greene, Gibson Dunn’s Ron Mueller, CalPERS Tamara Sells, and Wilson Sonsini’s Amanda Urquiza. Other sessions will include practical guidance on handling the compensation committee’s evolving role and how to protect your board from the next maelstrom.
Our “Early Bird” rate expires next Friday, June 10th – so register today for the best price. Sign up online, email sales@ccrcorp.com, or call 1-800-737-1271.
– Emily Sacks-Wilner