November 7, 2018
Director Pay: What’s “Excessive”?
– Liz Dunshee
Beginning in 2019, ISS will recommend a vote against members of the board committee responsible for setting non-employee director pay if the pay has been “excessive” for two or more years and there’s not a “compelling rationale” or other mitigating factors for that arrangement. This Exequity memo charts director pay stats for the S&P 500 and the Russell 3000 so that you can know what amount of compensation will be problematic.
The memo notes that if you come within 10% of the 95th percentile, you should be cautious about director pay increases and your director pay disclosures. It might make sense to clearly explain in the proxy statement why the pay levels are appropriate. I’ve also blogged about factors & program features that could lead to unexpected outcomes in the ISS evaluation…