You can register to attend today’s conference online and receive access to the archive of yesterday’s program by visiting our online store or by calling us at 800-737-1271. Our conferences are bundled together into a single two-day event for registration and pricing, so your purchase will cover both events.
– How to Attend Online: Our conferences are hosted online through the RingCentral Events platform. When you register for the conferences, you’ll receive a registration confirmation email that will contain your personalized “Magic Link.” Just click on that link to be instantly directed to the event. The Magic Link acts as an “access pass” into the event. It is unique to you and cannot be shared with others. It bypasses the need for registered users to sign into RingCentral Events and brings you directly into your RingCentral Events account and into the event.
Once in the event, click the “Stage” button from the menu on the left of the webpage. In order to view the session currently playing on stage, you will need to press the play button on the video. If you need technical assistance, members of our team will be available via email at info@ccrcorp.com to assist you throughout the conferences.
– Access to Archives & On-Demand CLE: Your registration includes access to the conference archives, which will be available until October 15, 2025 – but you’ll need your confirmation email to access them so be sure to retain it! One big reason to make sure you do that is that if you can’t attend the conferences live, you may earn on-demand CLE credit by viewing the archives. See these “CLE FAQs for Archived Conference Sessions (ON DEMAND)” for more information.
– Thanks to Our Sponsors! A huge “thank you” to our sponsors who have helped make these events possible. Our platinum sponsor for this year’s conferences is Goodwin, our gold sponsors are Fredrikson and Kirkland & Ellis, our silver sponsors are Alliance Advisors, Cooley, Fintool, King & Spalding, Latham & Watkins, Morrison & Foerster, The Nuvo Group, and Wilson Sonsini. Our digital partner is Aon. Our media partner is Newsfile, and those of you who are attending in-person should be sure to check out our exhibitor, DragonGC. We are extremely grateful for the support of our sponsors!
Our Conferences have finally arrived. We’re kicking things off today in San Francisco with our “Proxy Disclosure Conference” – and we’ll follow that up tomorrow with our “21st Annual Executive Compensation Conference.” The agendas for our conferences include 15 substantive panels over 2 days – as well as an interview with Erik Gerding, the Director of the SEC’s Division of Corporation Finance. Here’s what’s on tap for today.
We’re very excited to be back in-person for the first time since the pandemic, but if you can’t be here in person, you can still register to attend today’s program and tomorrow’s “21st Annual Executive Compensation Disclosure Conference” online by visiting our online store or by calling us at 800-737-1271. Our conferences are bundled together into a single two-day event for registration and pricing, so your purchase will cover both events.
– How to Attend Online: Our conferences are hosted online through the RingCentral Events platform. When you register for the conferences, you’ll receive a registration confirmation email that will contain your personalized “Magic Link.” Just click on that link to be instantly directed to the event. The Magic Link acts as an “access pass” into the event. It is unique to you and cannot be shared with others. It bypasses the need for registered users to sign into RingCentral Events and brings you directly into your RingCentral Events account and into the event.
Once in the event, click the “Stage” button from the menu on the left of the webpage. In order to view the session currently playing on stage, you will need to press the play button on the video. If you need technical assistance, members of our team will be available within the platform and via email at info@ccrcorp.com to assist you throughout the conferences. If you need technical assistance, members of our team will be available within the platform and via email at info@ccrcorp.com to assist you throughout the conferences.
– Access to Archives & On-Demand CLE: Your registration includes access to the conference archives, which will be available until October 15, 2025 – but you’ll need your confirmation email to access them so be sure to retain it! One big reason to make sure you do that is that if you can’t attend the conferences live, you may earn on-demand CLE credit by viewing the archives. See these “CLE FAQs for Archived Conference Sessions (ON DEMAND)” for more information.
– Thanks to Our Sponsors! A huge “thank you” to our sponsors who have helped make these events possible. Our platinum sponsor for this year’s conferences is Goodwin, our gold sponsors are Fredrikson and Kirkland & Ellis, our silver sponsors are Alliance Advisors, Cooley, Fintool, King & Spalding, Latham & Watkins, Morrison & Foerster, The Nuvo Group, and Wilson Sonsini. Our digital partner is Aon. Our media partner is Newsfile, and those of you who are attending in-person should be sure to check out our exhibitor, DragonGC. We are extremely grateful for the support of our sponsors!
Teneo’s analysis of recent S&P 500 proxy filings found that more companies have added DE&I metrics (16 companies) to compensation plans than removed them (10 companies) in 2023. But Teneo’s data suggests that many companies are saying less about their use of DEI metrics in their public disclosures (a sort of DEI-hushing?). Here are some specific data points from the summary of Teneo’s analysis in the HLS blog:
The majority of companies maintained the status quo with respect to DE&I pay metrics. Of those that disclosed DE&I pay metrics in 2022, 55% provided the same level of detail and did not indicate significant changes in 2023.
However, a third of companies scaled back the disclosure of DE&I pay metrics, or de-emphasized DE&I, while still maintaining it as a pay factor. Those that maintained DE&I pay metrics, but reduced disclosure, often did so by removing mention of the specific metrics and / or goals used. Other means of de-emphasizing DE&I as a metric include using related terms other than diversity (e.g., inclusion, belonging, etc.) or broadening the metrics used (e.g., from a diversity component to a talent component). …
Representation goals, often targeted by “reverse discrimination” cases, declined by six percentage points, but nevertheless remained the most commonly disclosed DE&I pay metric, cited by 33% of companies in 2023. Meanwhile, metrics for diverse talent development and broad DE&I strategies, such as establishing DE&I goals or action plans, each increased from 6% to 8% from 2022 to 2023.
In 2023, 42% of companies formalized the impact of DE&I performance on pay as a separate weighted component or modifier, up from 38% in 2022. Most often, DE&I metrics determined between 5% and 10% of incentive payouts.
We’ve previously noted that the impact of the Students for Fair Admissions cases was not fully reflected in the 2024 proxy season, given the timing of the opinion (released after most 2023 compensation decisions). Debevoise recently reported that companies have since revisited DEI metrics — meaning that we may see more movement in the 2025 proxy season — but are unlikely to walk away from DEI goals altogether given their importance to workforce strategies and long-term performance.
NFP’s latest Executive Benefits Trend Report focuses on nonqualified deferred compensation plans. It says NQDCPs are often a vital part of successful pay packages but may not be well understood with “significant untapped opportunities for executive benefits optimization” and “a notable gap between the benefits offered and their perceived impact.”
The data reveals a growing trend of executives becoming more discerning about their benefits: 44% of companies report that executives are increasingly demanding of the benefits they receive
This heightened interest is also reflected in NQDCP participation intentions, with some participants planning to increase their involvement: 21% aim to get ahead of future tax rates; 13% seek to combat inflation
These statistics highlight the strategic thinking of executives who view their benefits packages not just as compensation but as tools for long-term financial planning and wealth preservation.
Despite the demand among executives, two-thirds of executives feel like they don’t fully understand their benefits. The alert recommends improving participant understanding to ensure executives make full use of the benefits offered to them, especially given the increasing demands for NQDCPs. Improving your internal communications about NQDCPs doesn’t just help the executives; it “also maximizes the return on investment in these valuable retention and motivation tools.”
Check out the report for tips on:
– Tailoring NQDCPs to company objectives
– The importance of plan communication and knowledge-sharing
– Evolving retirement behaviors of executives
– Balancing executive benefits with financial concerns in an uncertain economic climate
– Leveraging executive retention as a hedge against uncertainty
Our “Proxy Disclosure & 21st Annual Executive Compensation Conferences” are right around the corner — next week Monday, October 14, and Tuesday, October 15 – bundled together as one great event that you can attend with us in person in San Francisco or virtually!
On October 14th, we’ll take a deep dive into the upcoming proxy season with the “2024 Proxy Disclosure Conference” – with panels on shareholder activism, governance & disclosure of AI, cyber-related disclosure trends, shareholder proposal trends, climate disclosure updates, and more. Plus, you don’t want to miss our first-ever “All-Star Feud,” during which our intrepid “SEC All-Stars” will face off gameshow-style over burning questions on proxy disclosure and executive compensation.
On October 15th, we turn our attention to critical executive compensation matters at the “21st Annual Executive Compensation Conference” – including key updates on proxy advisors, clawback practices, compensation trends, and perks.
In addition to live and on-demand access to these fast-paced sessions, Conference attendees get exclusive access to our Course Materials – which include unique & practical bullet points and examples from our experienced speakers on each topic we’ll be covering. Our speakers go the extra mile to provide usable takeaways. The Course Materials are an invaluable resource to refer back to as proxy season approaches!
For those seeking CLE credit, here’s a list of states in which credit is available – and CLE FAQs about live and on-demand credit.
Act Now: The Conferences begin next Monday, October 14th. With 17 sessions over 2 days, you’ll walk away with action items to help support director elections and say-on-pay, leverage your executive compensation, and avoid costly mistakes. You can still register. Sign up online or by calling 1-800-737-1271.
If you’ve already registered, remember that your unique access link and attendance instructions will be emailed to you from no-reply@events.ringcentral.com. Here’s more detail on what to watch for.
We knew from Corp Fin Staff statements earlier this year that the disclosure review team might take a more detailed approach to reviewing year two PvP disclosures. So we were all warned that 2024 comments may delve into disclosure details and require you to respond with an analysis. We’re now starting to see that play out with new PvP comment letters recently becoming public. Here are some high-level thoughts about the comments and correspondence we’ve seen so far:
– Consistent with recent Staff comments, the comment letters clarify that stating that no relationship exists (even if a particular measure is not used in setting compensation) isn’t compliant with Item 402(v)(5)(ii) — especially where a relationship may exist. The Staff has stated that graphical depictions are useful. That seems particularly true when a registrant is struggling to provide narrative disclosure.
– The Staff is comparing PvP table disclosures with the Tabular List and comparing PvP table components with numbers in the audited financial statements.
Multiple comment letters take issue with companies using the phrase “year-over-year” when describing the adjustment for the fair value of equity awards that vested during the year. In one case, the company was calculating CAP correctly and committed to providing more precise/descriptive headings in the reconciliation tables in footnotes to the PvP table in the future.
In another case, the Staff commented on a company’s failure to present CAP calculations in a footnote. The Staff could nonetheless tell from the Summary Compensation Table that the company was subtracting “All Other Compensation” from the SCT Total to calculate CAP and reminded the company of the specific adjustments required by the rule (relating to defined benefit and actuarial pension plan and stock and option award amounts).
– The Staff is comparing the company’s stock performance graph. They are also reminding registrants of the need to list all the companies comprising the peer group if the company doesn’t use a published industry or line-of-business index.
– In one comment, the Staff took the position that companies shouldn’t be taking advantage of Regulation S-K CDI 128D.03 and limiting footnote reconciliation disclosures to the most recent fiscal year if CAP values reported for prior years were revised in the latest proxy statement to correct errors.
Clearly the Staff is indeed taking a detailed look at disclosures and diving into the calculations of CAP to confirm adjustments were made appropriately. In some cases, the calculation issues were actually related to transcription or calculation errors — pulling the wrong numbers from the SCT, failing to provide an average or improperly rounding. While Corp Fin didn’t hold up annual meetings and companies have generally committed to changes in future proxy statements (for a notable example, see this cursory response by Berkshire Hathaway), a clear takeaway here is to have your PvP numbers checked and rechecked by folks who know what values the table should be reporting.
I blogged last month about Compensation Advisory Partners’ annual study of director compensation trends at the 100 largest US public companies. In the latest 22-minute episode of “The Pay & Proxy Podcast,” Meredith discussed more details and observations from the study with CAP’s Daniel Laddin and Matt Vnuk – as well as why & how companies outside of the “top 100” can use these trends. They covered:
1. Median board compensation in fiscal 2023 and expectations going forward
2. Trends in non-employee director pay program design, including pay structure and equity vehicles
3. Compensating board members for committee service and leadership roles
4. Shareholder-approved director compensation limits
5. Suggestions for those who advise on, set, or disclose director pay
FW Cook has released its Annual “Top 250 Report” – which examines the long-term incentive practices & trends of the 250 largest companies in the S&P 500. This year’s report examines trends in financial and non-financial metrics, goal setting practices, and actual payouts, comparing findings over 2-year and 5-year periods. Key findings include:
– Plan Design: Annual incentive plans typically incorporate a combination of non-financial and two to three financial measures, with profitability and revenue measures remaining the most prevalent. There is a small but growing trend of companies using four or more financial measures to create a more holistic evaluation of performance. The use of non-financial measures continues to be a significant component of annual incentive plans, with 79% of companies incorporating them in 2024.
– Target Goal-Setting: Most companies set more challenging target goals in 2023 relative to prior year actual results. At the median, the Top 250 companies set 2023 profit targets 4% above 2022 actual performance and revenue targets 5% above 2022 results. This is a slightly more conservative approach compared to prior reports reflecting potential caution amid market uncertainty.
– Threshold & Maximum Goals (Performance Goal Ranges): Median performance goal ranges for revenue and profit have remained stable since 2019, with profit metrics set at +/-10% of target and revenue metrics set at +/-5% of target. Cash flow performance goal ranges exhibited more variability, with threshold set at -18% and maximum set at +15% of target.
– Bonus Payouts: 2023 was a strong year for the Top 250 companies, with 7% growth in both revenue and operating income, alongside median TSR of +16%. The median CEO annual incentive payout was 127% of target, demonstrating general alignment with performance, although slightly below the 150% payout observed in 2021 when median TSR was 29%.
Meredith blogged a few weeks ago that this proxy season may have marked the lowest say-on-pay failure rate ever observed. This Semler Brossy report says that as of September 26th, average support at Russell 3000 companies is at 91% – the highest since 2017. Wow! Here are more detailed observations:
– The 1.2% failure rate among Russell 3000 companies (equating to 27 companies) is also lower than any year-end failure rate over the last 10 years. Last year at this time, 2.1% of companies had failed say-on-pay (47 companies).
– 11.1% of Russell 3000 companies and 7.7% of S&P 500 companies have received an ISS “Against” recommendation thus far in 2024. This divergence is a continuation of trends since 2022.
– The gap between the S&P 500 and Russell 3000 average vote support is equal to the gap from 2023. This continues the trend of lower support for larger companies that has persisted over the last five years.
In addition to sharing trends, the report details likely causes of say-on-pay votes under 50% in 2024 – with most relating to a perceived disconnect between pay and performance. Problematic pay practices and rigor of performance goals also played a role at a number of companies.