April 1, 2025
What This Year’s First 100 Proxies Say About Executive Compensation
Pearl Meyer recently reviewed the first 100 proxies filed by S&P 500 companies in 2025. These proxies primarily report on 2024 compensation, although some companies also disclose what they plan to do in 2025. Here are the key takeaways:
– Median CEO total compensation was $17.7 million in 2024, reflecting a 9.8% rise over 2023, mostly driven by increases in short- and long-term incentive values.
– Performance-based stock awards continue to be the predominant long-term incentive vehicle. Relative Total Shareholder Return (rTSR) continues to be the most prevalent performance-based equity award measure, with 64% of the first 100 S&P 500 proxy filers using that measure in 2024.
– Security-related perquisites increased in prevalence, likely reflecting heightened board concerns over executive safety.
– Diversity-related incentive measures significantly decreased in prevalence as companies increased focus on financial and strategic measures of performance.
On security-related perks, the memo gives this additional color:
Among the first 100 S&P 500 proxy filers in 2025, there is early evidence of an increase in executive security-related perquisites. We found the prevalence of disclosed security perquisites for CEOs increased from 24% in 2023 to 31% in 2024.
Following the United Healthcare murder late in 2024, boards are increasingly concerned as to the safety of CEOs and senior leadership. We expect the prevalence to increase further in 2025 as several companies prospectively disclosed adoptions of security programs in 2025 that don’t yet show up as perquisites for 2024.
On diversity-related metrics, I blogged in February about how companies have been refining or removing these metrics over the course of the past 1-2 years. Here’s what Pearl Meyer found on that from the early 2025 proxy statements:
The significant increase in recent years in the use of ESG and, more specifically, diversity and inclusion measures in executive incentives appears to be reversing course, at least in part due to the current political and social environment. Among the first 100 S&P 500 proxy filers, the prevalence of diversity measures in incentive programs sharply declined from 65% in 2023 to 35% in 2024. We expect a further decline in prevalence in 2025 as several companies proactively disclosed discontinuation for 2025.
– Liz Dunshee