February 1, 2022
Say-on-Pay: 2021 Had Mixed Results
There’s been a lot of back & forth on whether shareholders actually provided lower support for say-on-pay resolutions last year. That’s probably because the data was mixed. Semler Brossy’s year-end summary explains:
– The Russell 3000 average Say on Pay vote (90.4%) was consistent with the prior two years.
– The Russell 3000 did see an uptick in failures (63).
– At least 32% of failures happened because of Covid-19 pay actions.
– In the S&P 500, average vote results decreased to 88.3%. This was 130 basis points below the prior year result and 210 basis points below the Russell 3000 average vote.
It’s easy to go around & around with stats, but the bottom line is that companies should not get complacent about say-on-pay. I’ve previously blogged that low support is “blood in the water” for activists. Semler Brossy’s report says that over the past 5 years, average direct support at companies that received a say-on-pay vote below 50% in the prior year is 5% lower than at companies that received above 70% support.
– Liz Dunshee