The Advisors' Blog

Liz shared on TheCorporateCounsel.net earlier this week that, in late October, Glass Lewis announced the results from its annual policy survey. As she noted, you might be wondering, “does this still matter, since Glass Lewis is moving away from its house policy?” She says the answer is “yes,” for a few reasons:

1. That move isn’t happening until 2027.

2. Even after the “house policy” disappears, Glass Lewis is still going to provide research and perspectives to clients – it’s just that everything will be more customized, which is already happening at a certain level. Glass Lewis says results from the policy survey inform its case-by-case analysis of company circumstances in the research and filters that it provides to its global client base.

3. The policy gives insight into investors’ current views on several hot topics.

Here are a few takeaways on those hot topics related to compensation:

Make Whole Awards: Over the past year, use of the make-whole designation for U.S. sign-on awards has risen. Over half of all S&P 500 sign-on awards were identified as make-whole compensation this year, compared to 38% in 2024.

Non-investors were far more likely to view make whole awards as fundamentally different from other sign-on awards (40.8%, compared to just 5.3% among investors). Investors were split; while the top answer was to treat make whole grants on the same basis as other sign on awards (50%, compared to 27.6% among non-investors)), nearly as many were willing to view them differently so long as the grants are fully disclosed and clearly equivalent to what was forfeited (44.7%, compared to 31.6% among non-investors).

Time-Based Awards: U.S-based investors were far more open to the sole use of time-based awards as a part of the ongoing compensation structure so long as the practice was common with peers (43.5%, compared to 9.5% among investors from other regions) or as a retention measure (17.4% vs 9.5%). Meanwhile, investors from other regions appeared more likely to view them as a temporary stopgap, such was when the company is newly public (33.3%, compared to 13% among U.S. investors) or following a significant change in business strategy (38.1% vs 8.7%).

CEO Pay Ratio. To prepare for the possibility of reduced disclosures from the SEC regarding executive compensation, we asked for feedback on what elements of reporting are considered important to communicating and assessing U.S. executive compensation programs.

While most investor views were roughly aligned, there was a geographic split on the pay ratio, with 44% of U.S. respondents viewing it as not important, compared to just 8% among investors from other regions.

– Meredith Ervine