The Advisors' Blog

With median pay packages for CEOs breaking records this year, here’s an updated Semler Brossy report (with data as of May 5) showing that the current S&P 500 average say-on-pay vote result (at 87.3%) is below the index’s average at this point last year (at 89.6%).  There’s also a widening spread between the average say-on-pay vote results in the Russell 3000 and S&P 500 indices – at 320 basis points this year vs. 210 basis points at year-end in 2021.

However, from a 30,000 ft. level, companies seem to be cruising, as the say-on-pay failure rates for both the Russell 3000 and S&P 500 are significantly lower than the failure rates this time last year. Semler Brossy found that the “Russell 3000 is 210 basis points lower at 1.9% and the S&P 500 is 260 basis points lower at 3.6%.”  Here are a few other stats from the latest Semler Brossy memo:

– 8.6% of Russell 3000 and 12.7% of S&P 500 companies have received an ISS “Against” recommendation thus far in 2022. The Russell 3000 “Against” rate is 270 basis points lower than the rate observed last year, and the S&P 500 “Against” rate is 160 basis points higher.

– Over the past five years, average Director election vote support at companies that received a Say on Pay vote below 50% in the prior year is seven percentage points lower than at companies that received above 70% support.

– Average vote support for equity proposals thus far in the proxy season (91.0%) is 130 basis points higher than the average vote support observed at this time last year (89.7%).

– Companies receiving less than 90% Say on Pay vote support have had higher average equity plan proposal support in 2022 than in previous years.

– Emily Sacks-Wilner