The Advisors' Blog

Over on the Proxy Season blog, Liz previously talked about all the nuggets from Georgeson’s annual proxy season review (which is available for download here). Here are some compensation-related highlights:

– Say-on-pay vote results for 2022 season YTD are witnessing a marginal decline in the average support for Russell 3000 companies, with approximately 90.2% of votes cast in favor (excluding abstentions), compared to 91% support in 2021. As we have been seeing in recent years, S&P 500 companies have garnered slightly lower support, with approximately 87.8% of votes cast in favor YTD, also down slightly from 2021 when they received 88.5% favorable support.

– 35 Russell 3000 companies have failed to receive majority support for their say-on-pay proposals so far in the 2022 season, with 27 failed votes occurring since January 1, 2022. Nearly one-third of these companies are in the S&P 500 index, with 12 failed votes in 2022 YTD and 9 since January 1, 2022…The sizable retention grant to the CEO, which is entirely time-based and also vests after a relatively short period of time, seems to have contributed to significant shareholder opposition.

– In assessing pay for performance alignment in 2022, a common concern for both shareholders and ISS seems to relate to goal rigor of incentive programs, as some companies have lowered targets following challenging business conditions due to the ongoing pandemic.

We’ve been tracking Say-on-Pay results closely for the past few months – and you can always look back to our “Say-on-Pay” Practice Area to re-experience the action. One other point of note from Georgeson’s report: there have been a number of new shareholder proposals (13 so far this year) “leveraging companies’ CEO pay ratio information” – these proposals are requesting that companies take workforce compensation into account when setting CEO pay. Of the three voted on prior to the report, support ranged from ~8-11%.

While these aren’t eye-popping support numbers, Liz previously flagged that universal proxy rules are going to be upon us soon – and the high pay ratio is itself a vulnerability for compensation committee members. We’ll be diving into the latest insights & best practices from top compensation consultants during our “19th Annual Executive Compensation Conference” – happening virtually on October 14th, with Semler Brossy’s Blair Jones, FW Cook’s Bindu Culas, Weil Gotshal’s Howard Dicker and Pay Governance’s Tara Tays. Here are the full agendas for the “Proxy Disclosure & 19th Annual Executive Compensation Conferences” – 18 action-packed sessions over the course of 3 days – October 12-14th. Register today – sign up online, by email sales@ccrcorp.com or call 1-800-737-1271.

– Emily Sacks-Wilner