The Advisors' Blog

CalPERS, which due to its position as the largest public pension fund in the US is an influential investor at many public companies, articulated priorities for the current proxy season as part of a recent Investment Committee meeting. Executive pay remains a priority for this proxy season. Specifically, CalPERS will focus on engagement on relative underperformers with continual higher relative pay. The pension fund will continue to withhold votes from directors at companies with poor pay practices. The “Proxy Voting & Corporate Engagement Update” presented at last month’s Investment Committee meeting shares these results on executive pay votes over the past two years:

– Voted “against” 49% of management say-on-pay proposals versus 55% “against” in 2021

– Voted “against” 1,289 Compensation Committee members in 2022 versus 3,079 in 2021

Although that’s still a lot of “against” votes, at least there was as year-over-year improvement, from the corporate perspective.

Meanwhile, BlackRock – the world’s largest asset manager – has said in its Investment Stewardship team’s engagement priorities that it will want to talk with compensation committee member(s) if it identifies “apparent misalignments” between executive pay & performance or has other concerns about a company’s compensation policies. BlackRock will also vote against both say-on-pay and compensation committee members if say-on-pay is on the ballot and it concludes a company has failed to align pay with performance. That’s consistent with the voting guidelines announced in December.

BlackRock’s 2022 voting spotlight shows that it:

– Supported 91% of say-on-pay proposals in the Americas in 2022

– Voted “against” 1,079 compensation committee members in 2022 (382 directors in the Americas)

– Liz Dunshee