Yesterday, Glass Lewis issued a major announcement about what it calls “substantial enhancements to its business model.” Glass Lewis points out that these enhancements are made possible by technological advancements, in particular AI and smart technology that enables customization of its proxy voting advice. The announcement notes:
Over the next two years, Glass Lewis plans to make two significant changes to the way it applies proxy voting policies and delivers its highly-regarded proxy research and voting recommendations.
First, Glass Lewis will help all clients move beyond standard policies, guiding them in creating voting frameworks that reflect their individual investment philosophies and stewardship priorities. A majority of the firm’s clients already use their own custom policy guidelines or a specific thematic policy. The goal is to enable all clients to vote according to their own policies.
Second, Glass Lewis will move away from singularly-focused research and vote recommendations based on its house policy and shift to providing multiple perspectives that reflect the varied viewpoints of clients. While still under development, the spectrum of perspectives could range from one that leans toward management and others that reflect more governance fundamentals. Beginning in 2027, clients will be able to access any or all of these perspectives to inform their proxy voting decisions.
“Technology has advanced enough now to allow us to apply smart technologies and AI in particular to complex proxy voting processes,” said Mann. “With these tools, Glass Lewis is modernizing proxy voting practices, removing the perception of influence, and transforming proxy voting into a more strategic and client-driven experience.”
The abandonment of benchmark voting policies in favor of more bespoke voting advice could potentially complicate the proxy voting and engagement environment, as companies try to determine how investors will vote on specific proposals and director elections. At the same time, the technology-enabled move to more tailored voting advice could ultimately result in more moderate (and less extreme) voting policy outcomes. In any event, the move by Glass Lewis is big news for the proxy advisory business, as well as for companies and investors.
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 link. Just click on that link to be instantly directed to the event. The link 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.
– Access to Archives & On-Demand CLE: Your registration includes access to the conference archives (including written transcripts!), which will be available until October 21, 2026 – 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 sponsor is Ballard Spahr, our silver sponsors are Cooley, King & Spalding, Kirkland & Ellis, Latham & Watkins, Morrison Foerster, O’Melveny, Sidley, Troutman Pepper Locke, and Wilson Sonsini – and a special shoutout to our breakfast roundtable sponsors Cleary and Dragon GC. We are extremely grateful for the support of our sponsors!
I’m thrilled to be joined by so many of you in Las Vegas and virtually this week, beginning with our “Proxy Disclosure Conference” today and continuing with our “22nd Annual Executive Compensation Conference” tomorrow. The agendas for our conferences include 15 substantive panels over 2 days. Today’s programming includes these exciting panels:
If you can’t be here in person, you can still register to attend today’s program and tomorrow’s “22nd Annual Executive Compensation Conference” online by visiting our online store or by calling us at 800-737-1271. (And if you miss any panels, your registration includes access to the archives!) 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 link. Just click on that link to be instantly directed to the event. The link 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.
– Access to Archives & On-Demand CLE: Your registration includes access to the conference archives (including written transcripts!), which will be available until October 21, 2026 – 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 sponsor is Ballard Spahr, our silver sponsors are Cooley, King & Spalding, Kirkland & Ellis, Latham & Watkins, Morrison Foerster, O’Melveny, Sidley, Troutman Pepper Locke, and Wilson Sonsini – and a special shoutout to our breakfast roundtable sponsors Cleary and Dragon GC. We are extremely grateful for the support of our sponsors!
FW Cook has just released a very detailed report on executive perks reported by S&P 100 companies for 2021 to 2024. Not surprisingly, the most common perks are personal use of corporate aircraft and security services — and data on those two perks dominates the report as well.
Aircraft: The prevalence of personal use of the corporate aircraft has slightly increased in the past three years. Roughly two-thirds of the S&P 100 companies that provide corporate aircraft also require their CEO to use it for all personal travel.
The median reported value for personal use of aircraft increased from $129K in 2021 to $210K in 2024. About 20% of the companies with an aircraft perquisite disclosed an annual limit on personal travel, typically defined as a maximum dollar value rather than a maximum number of flight hours, with a median limit of $250K per year.
Security: The prevalence of personal and residential security perquisite increased from 38% in 2021 to 59% in 2024. The median reported value for personal and/or residential security increased from $75K in 2021 to $111K in 2024.
While median spending on executive security benefits grew modestly from 2021 to 2024, the cost of these benefits increased significantly at the 75th percentile, climbing from $348K in 2021 to $784K in 2024. The wide variation in spending often depends on the level of protection provided. Lower costs typically cover only residential security systems, while the highest costs include comprehensive protection including secure transportation, armed drivers, and personal security details.
The report also delves into company-provided vehicles or personal drivers, charitable gifts, club memberships, executive physicals, financial planning or tax prep services, perk allowances, life insurance and long-term disability.
Perks are on the agenda of multiple panels at our “Proxy Disclosure and 22nd Annual Executive Compensation Conferences” that start tomorrow! There’s still time to register to attend — including to “attend” from the comfort of your home or office. Just email us at info@ccrcorp.com, call us at 800-737-1271, or visit our online store.
If you’re attending in person, we’ll see you beginning at 4 pm Pacific today in the Primrose Hallway at The Virgin Hotels for a casual evening reception celebrating CCRcorp’s 50th anniversary.
The SEC’s pay versus performance rule is one that most companies love to hate – the sentiment that it was created “by economists, for economists” rings true for a lot of us. While the info might be unwieldy and arguably not material to investors, this blog from Stephen O’Byrne of Shareholder Value Advisors points out that companies themselves may have the most to gain from the disclosures.
In short, with the SEC’s standardized format and requirement for both absolute and peer-relative performance comparisons, companies now possess a new dataset: their own long-term compensation and performance history, presented in a way that can be compared with peers. Stephen’s blog walks through how compensation committees could use the data to make pay programs more effective at motivating and retaining executives. A recent paper from Stephen explains what that looks like:
The conventional wisdom in U.S. executive pay is that maintaining a target pay percentile with a high percent of pay at risk achieves the three basic objectives of executive pay. Not letting target pay fall below the median retains key talent, not letting target pay rise above the median limits shareholder cost and a high percent of pay at risk ensures a strong incentive.
The new Pay Versus Performance (PvP) data provides the data – “mark to market” pay – to test the conventional wisdom. Individual company regressions relating relative mark to market pay to relative TSR quantify incentive strength (slope), alignment (correlation) and performance adjusted cost (the intercept). These regressions show that the conventional wisdom only works for about 15% of companies.
To help understand the weaknesses of the conventional wisdom, I show that that there is a simple pay plan with annual grants of performance shares that provides a perfect correlation of relative pay and relative TSR and that this perfect correlation pay plan differs from conventional practice in two ways. First, it says that target pay should be market pay adjusted for trailing relative performance, not market pay regardless of past performance. Second, it says that vesting should take out the industry component of the stock return, not use company performance to leverage industry performance as plans with relative TSR vesting do.
The perfect correlation plan shows that mark to market pay should be equal to the expected future value of cumulative market pay plus a fixed and symmetric share of the excess return. It shows how to improve executive pay by combining fixed sharing – the guiding concept of executive pay before World War II – with competitive pay levels – the guiding concept of executive pay since World War II.
Stephen has a couple otherblogs that further explain how to use PvP data. This recent Pay Governance memo also defends the usefulness of “compensation actually paid.”
As Pay Governance noted in its memo – and as we’ve shared on thisblog – many comment letters submitted in response to the SEC’s Executive Compensation Roundtable earlier this year suggested ways to improve – or eliminate – mandated PvP disclosures. Getting an edge in performance means a lot these days (probably even more than a favorable “say-on-pay” vote). Companies that want to use PvP data to help incentivize and retain executives may want to make the most of it while it’s still here.
Now’s the time for compensation committees to lay the groundwork for annual compensation reviews and decisions. This FW Cook blog explains why analyzing the “holding power” of outstanding equity awards should be part of that:
Absent “perfect” succession planning, the loss of key talent is at best distracting and at worst disruptive to business operations. While no Committee can guarantee with absolute certainty that leaders will not be poached, periodically reviewing Holding Power enables proactive, informed decisions instead of reactive and costlier ones down the line. And unless managed carefully, costs incurred to onboard a replacement may prompt scrutiny from investors and proxy advisors, place undue pressure on equity budgets (absent use of inducement-plan shares), and create internal tension if remaining executives do not fully appreciate the dollars spent to entice a new hire. For these reasons, a review of Holding Power multiples is a prudent component of the annual compensation planning cycle and supports good governance.
Looking at S&P data as of September 30th, FW Cook found that CEOs have the highest proportion of at-risk unvested equity compensation. The median multiple is 2.2x target Total Direct Compensation – but the blog points out that each company should take a more nuanced approach to its own figures:
More meaningful comparisons of Holding Power come from benchmarking against executive compensation peer groups, since the output is sensitive to several factors: market and company performance (with higher returns and above-target payout estimates boosting Holding Power), the size and mix of equity awards (often correlated to market capitalization), and specific industry practices. For instance, high-growth sectors such as technology and life sciences generally rely more heavily on equity compensation and stock options, which offer additional leverage and potential for greater multiples when share prices rise. Because of these dynamics, Holding Power is best interpreted relative to target TDC and through the lens of peers facing similar market and industry conditions.
Below-median multiples should not be viewed as an automatic red flag; factors like short tenure or recent promotion can naturally depress an executive’s unvested holdings. Instead, treat the data as a guidepost that indicates whether an executive’s Holding Power appears below, in-line, or above market norms, and discuss whether action is warranted. While high unvested holdings do not guarantee retention, periodic reviews can help Committees lessen the risk of unforeseen and costly departures.
In the blog, FW Cook points out that it focused on unvested equity for its S&P 500 analysis, but when you do this in practice, forfeitable long-term cash awards can also be part of the calculation. Members of this site can visit our “Determining How Much Pay is Appropriate” Practice Area to access other resources on setting executive pay and designing awards.
If you haven’t registered, time is running out! The Conferences are happening next Tuesday & Wednesday – October 21st & 22nd. Register online or by emailing info@ccrcorp.com or calling 1.800.737.1271.
Way back in January – which is when we started planning this year’s “Proxy Disclosure & 22nd Annual Executive Compensation Conferences” – we knew that we’d have some big things to discuss by the time they rolled around. But the degree of change and uncertainty we’re dealing with right now is even more than we bargained for! Next week, we’ll be convening at The Virgin Hotel in Las Vegas – and out of all the bets in Vegas, the safest one is that everyone at the Conferences is going to benefit from real-time info about what’s happening. Here are a few late-breaking topics that we’ll touch on during our fast-moving agenda:
1. What the government shutdown means for public companies and proxy season
2. The potential overhaul of executive compensation disclosure as we know it
3. A paradigm shift for Rule 14a-8 shareholder proposals
4. Changes to the shareholder voting & engagement landscape
5. Hot topics for boards
6. “DExit” and other state law developments
7. How director elections are changing
8. And more!
As year-end and proxy season approach, the best way to prepare for these changes – and stay sane – is to gather together & hear from the best in the biz. Whether you’re attending the “Proxy Disclosure & 22nd Annual Executive Compensation Conferences” virtually or in person in Vegas, know that you’ll walk away with practical tips. If you haven’t registered, time is running out! The Conferences are happening next Tuesday & Wednesday – October 21st & 22nd. Register online or by emailing info@ccrcorp.com or calling 1.800.737.1271.
If you’ve already registered, whether that’s in-person or virtual, you can now join the event platform! That’s where you’ll find the helpful course materials and much more! Here’s more info on how to access the platform.
We hope many of you join us in person in Las Vegas for our Proxy Disclosure & Executive Compensation Conferences — in less than two weeks! Whether you join us in person or virtually, I promise you’ll come away with loads of valuable insights & practical takeaways you can apply in your practice immediately. Our two days of content will feature 15 panels and nearly 50 seasoned proxy experts and corporate practitioners discussing the latest developments, tested strategies and emerging trends in our industry to help you navigate an uncertain environment and tackle the 2026 proxy season head-on.
As a “sneak peek” for our blog subscribers who are attending, we will be posting our “Course Materials” containing over 200(!) pages of practical nuggets to our conference platform this week! Our course materials are full of originally crafted practical bullets & real-life examples from our expert speakers — not just rule releases & old memos. If you haven’t registered for our conferences, we’ve posted the detailed panel agendas so you can see all the specific topics each panel will tackle.
Wednesday’s panel “The SEC All-Stars: Executive Pay Nuggets” featuring speakers with decades of experience and knowledge of the inner workings of the Commission will be addressing what’s new and what’s on the horizon for SEC guidance and rulemaking and current hot topics – including executive security, insider trading policies, CEO transitions and navigating volatility in your executive compensation program.
Don’t miss it! You can sign up online – or contact our team by email at info@ccrcorp.com or by phone at 1.800.737.1271.
If you’re attending in person, join us on Monday, October 20th, from 4:00 to 7:00 pm PT for a casual reception celebrating CCRcorp’s 50th anniversary and offering you an opportunity to network with your fellow attendees, sponsors, exhibitors and our CCRcorp team!
The Jasper Street Partners September insight (subscribe for the full version!) shares some details about say-on-pay support this year, highlighting nuances within the overall positive trend.
Among the largest investors, BlackRock recorded notably higher support levels than previous years, and Vanguard and SSIM again supported 95+%.
At the same time, support among many large active managers – including Fidelity, Capital, Invesco, Franklin, Wellington and Nuveen – has declined.
Jasper Street is seeing many active managers vote differently than the “default” recommendation by their firm’s proxy voting team — which can either help or hurt companies.
Investor concerns that go unaddressed can fester and have more meaningful consequences. This is particularly the case if the “against” vote was driven by the firm’s portfolio managers.
Even with 80%+ support levels, it says companies cannot afford to ignore ‘against’ votes from large shareholders.
This Troutman Pepper Locke alert describes some more compensation considerations from the One Big Beautiful Bill Act (OBBBA) — with a focus on changes to Sections 162(m) and 4960. The memo first level sets on the pre-OBBBA status of 162(m):
Section 162(m) limits the federal income tax deduction that a publicly held corporation may claim for compensation paid to any “covered employee” to $1 million per year. Covered employees include the principal executive officer, principal financial officer, and the three other highest compensated executive officers of the publicly held corporation. For years after 2026, covered employees also include the next five highest compensated employees, whether or not executive officers (the “five highest paid employees”). Anyone who was a covered employee for a year beginning after December 31, 2016, remains a covered employee for all future years, even after termination of employment (the “once covered, always covered” rule). However, the once covered, always covered rule does not apply to the five highest paid employees.
The section 162(m) limit applies to all compensation, including salary, bonuses, equity awards, and other taxable remuneration, regardless of whether the compensation is performance-based. IRS regulations require the deduction limit to apply to all compensation paid by the corporation and any members of its “affiliated group” as determined under section 1504 (excluding the provisions of section 1504(b)), and the disallowed deduction is prorated among payors.
It then continues with this discussion of OBBBA changes:
For tax years beginning after December 31, 2025, OBBBA requires the section 162(m) deduction limit to apply to a publicly held corporation and all members of that corporation’s “controlled group” under sections 414(b), (c), (m), and (o), instead of the “affiliated group” under section 1504 as currently required by the section 162(m) regulations. This change means that publicly held corporations must consider compensation paid to employees by all members of the controlled group, both for identifying the covered employees and for determining the amount of compensation received by those covered employees subject to the section 162(m) deduction limit.
While “controlled group” and “affiliated group” are both “used to aggregate related entities for various federal tax purposes,” they “have distinct definitions, requirements, and applications” with “controlled group” being the broader concept.
Practically, the memo says this change may especially hit “UPREIT” and “Up-C” business structures. That’s because the primary impact will be for public companies with partnerships or other noncorporate entities in their controlled group that were not in their affiliate group, and only to the extent those entities pay compensation to employees. Since Section 162(m) doesn’t “present any significant tax planning or mitigation opportunities,” the main task here is to look out for additional guidance and then make sure you identify the correct controlled group for the 2026 tax year.