The Advisors' Blog

ISS recently wrote a piece on say-on-pay outcomes and one-time awards for the HLS Corporate Governance blog. The blog reiterates the continued strength of say-on-pay outcomes, but here’s an interesting tidbit:

Increases in the prevalence and size of one-time awards have not translated into lower support levels or more failures. Rather than reflecting a reduction in the use of one-time awards, companies may be deploying them more selectively or structuring them in ways that mitigate investor concerns.

As far as trends in the use of one-time awards, the blog shares:

Following a post-pandemic peak of nearly 30% of Russell 3000 companies in 2021, the prevalence of one-time equity awards declined steadily through 2024, bottoming out at 25% and reflecting a normalization of compensation practices. However, year-to-date data disclosed for fiscal year 2025 indicates a reversal of that trend, jumping to 27% [. . .]

Most one-time equity awards remained concentrated in modest value ranges, with a majority falling below $5 million. However, the upper end of the distribution has shifted. Among S&P 500 companies, larger one-time awards have become more common, particularly in the $5 million to $20 million range.

Notably, so-called mega grants exceeding $20 million increased in 2025 rising in prevalence by approximately 63% over the previous peak in 2021. These mega grants are most often associated with executive recruitment, retention, or leadership transitions requiring companies to secure or retain key talent.  Although these awards remain rare, the increase suggests more willingness among some large-cap companies to utilize sizable grants. In contrast, companies across the broader Russell 3000 exhibit a more modest distribution, with most awards concentrated below $1 million and fewer in the largest tiers.

All types of one-time awards — sign-on, make-whole, retention, moonshot — get quite a bit of attention from investors and proxy advisors. To some extent, there has been a perception that special awards evidence that the regular annual compensation program isn’t working as intended. But I get the sense that this perception is shifting — maybe because companies have gotten better at communicating their rationale — and there’s greater recognition that there is an appropriate time and place for a special award. The blog says:

One-time awards typically remain a key tool for addressing discrete compensation situations, such as executive retention or transitions. Although prevalence remains below peak levels following the pandemic, the recent increase suggests companies have experienced a greater need to address retention and turnover concerns during the year.

As far as how companies can selectively deploy special awards and structure them in ways that mitigate investor concerns, I’m looking forward to hearing from our speakers on “The Top Compensation Consultants Speak” panel at our fall conferences, who will do a lookback at special awards in the last year and discuss do’s and don’ts.

Before you head out for the holiday weekend, take a few moments to register for our 2026 Proxy Disclosure and Executive Compensation Conferences on October 12th & 13th in Orlando, Florida and via webcast.

Our agenda features two full days of fast-paced, topical panels, an all-star speaker lineup, and Dave’s interview with Corp Fin’s Deputy Director Christina Thomas. Our Fall Conferences will be a great opportunity to get up to speed on the SEC’s latest rulemaking initiatives, as well as other developments in executive compensation, governance, disclosure practices, activism and shareholder engagement.

You can register online at our conference page or contact us at info@CCRcorp.com or 1-800-737-1271. Do it today so you don’t miss out on our discounted “early bird” rate!

Programming Note: Speaking of the holiday weekend, our blogs will be off tomorrow and return on Monday. Have a safe and happy Semiquincentennial Fourth of July.

– Meredith Ervine