September 10, 2024
Say-on-Pay: More Helpful Lessons from 2024 Results
WTW’s latest review of key compensation-related vote results and trends from the 2024 proxy season is out now with some added color on say-on-pay results — beyond the general takeaway that average support is similar to historical norms and the failure rate is down. Here are some of the other helpful lessons from the report:
– Seventeen companies failed the SoP vote for the first time in 2024, representing 63% of total failed votes. Top two reasons for first-time failures were: (1) poor disclosures and (2) special awards.
– The proportion of SoP failures from midcap and smallcap companies have been cut more than half in previous years.
- S&P 500 failures: 5 (2024), 13 (2023), and 22 (2022)
- Midcap failures: 6 (2024), 3 (2023), and 10 (2021)
- Smallcap failures: 2 (2024), 10 (2023), and 22 (2022)
- All other failures: 14 (2024), 27 (2023), and 32 (2022)
– There was an uptick in say-on-parachute failures this year, with many coming from deals voted on at the beginning of 2024. One-in-five (20%) say-on-parachute proposals failed in 2024, up from 16% in 2023. Single-trigger equity vesting remains the primary driver of say-on-parachute opposition, followed by provisions that allow performance awards to vest at maximum levels of performance during a merger.
– Meredith Ervine