June 1, 2022
Russell 3000 Say-On-Pay Failure Rate Reaches 2.7%
Here’s the latest Semler Brossy memo on say-on-pay results as of May 19, showing that 26 Russell 3000 companies have failed thus far (with 17 failures added since Semler’s last report, including Intel & PacWest Bancorp) – which brings the failure rate to 2.7%. The Russell 3000 failure rate is still lower than the failure rate Semler Brossy saw at this time last year (at 3.1%), but it’s above the average failure rate in 2020 (2.3%). Below are some additional excerpted stats:
– The current Russell 3000 average vote result of 90.4% is similar to the index’s average vote at this time last year (90.4%); the current S&P 500 average vote result of 88.3% is below the index’s average at this time last year (89.6%), and is consistent with the year-end vote result in 2021.
– The failure rates for the Russell 3000 and S&P 500 are lower than the failure rates at this time last year: the Russell 3000 is 40 basis points lower at 2.7% and the S&P 500 is 100 basis points lower at 3.4%.
– 10.0% of Russell 3000 and 10.8% of S&P 500 companies have received an ISS “Against” recommendation thus far in 2022.
You may also want to check out the chart on pg. 3 showing the likely causes of say-on-pay votes under 50% in 2022. The largest likely causes are problematic pay practices and mega-grants/special awards.
– Emily Sacks-Wilner