September 14, 2017

Survey Results: Pay Ratio Medians

We previously shared survey results on pay ratio readiness and pay ratio disclosure. Now we also have results from our latest survey in this series – “Pay Ratio Medians”:

1. For our employee determination date, we’re using:
– October 31st (or equivalent for non-calendar year companies) – 26%
– November 30th (or equivalent for non-calendar year companies) – 7%
– Fiscal year end – 36%
– Some other date – 31%

2. When it comes to “CACM,” we’re using:
– Base salary – 24%
– Total cash compensation – 15%
– Total gross compensation – 21%
– Taxable wages – 25%
– Some other measure – 15%
– No CACM, using annual total compensation instead – 0%

3. When it comes to using the de minimis exemption, we’re:
– Yes, we’re using the exemption – 14%
– No, we’re not using the exemption – 51%
– Don’t know yet – 35%

4. When it comes to excluding employees of acquired entities, we’re:
– Yes, we’re excluding – 4%
– No, we’re not excluding – 28%
– We don’t have acquired entities – 48%
– Don’t know yet – 20%

Course Materials: “How to” Pay Ratio Manual (w/ 138 Practice Nuggets) – For those registered for the upcoming “Pay Ratio & Proxy Disclosure Conference,” we have just posted this invaluable set of course materials: “How to” Pay Ratio Manual (w/ 138 Practice Nuggets).” This is 55-pages of practice pointers that you need now to prepare for pay ratio.

We decided to release these course materials early since so many are grappling now with the type of issues addressed in this “How to” manual. Just like the upcoming “Pay Ratio & Proxy Disclosure Conference” in October will comprehensively address these – and many more – issues. This comprehensive pay ratio event is one that you can’t afford to miss. Also remember that our third pre-conference webcast is September 27th.

Register Now: This is the only comprehensive conference devoted to pay ratio. Here’s the registration information for the “Pay Ratio & Proxy Disclosure Conference” to be held October 17-18th in Washington DC and via Live Nationwide Video Webcast. Here are the agendas – 20 panels over two days. Register today.

Proxy Season: ISS Corporate Solutions Notes 8 Key Trends
Last week, ISS Corporate Solutions issued a press release detailing 8 key trends for the latest proxy season. Here they are:

1. Shareholder proposals seeking more disclosure on climate change preparedness fared well in 2017, and three such proposals—at Exxon Mobil, Occidental, and PPL Corporation — received majority shareholder support.

2. Proxy access proposals topped the chart of the most commonly filed shareholder proposals, and most of the proposals to adopt proxy access that went to a vote received majority support.

3. Taken as a group, political contributions and lobbying proposals were the second most frequently filed shareholder proposals in 2017, and saw a slight uptick from 2016.

4. There was a spike in the number of directors receiving low levels of support from shareholders; 102 directors at S&P 500 companies, or 2.4 percent, received less than 80 percent shareholder support during proxy season, the highest figure since 2011.

5. Median CEO pay at S&P 500 companies rose by 7%.

6. 2017 was the second time that most companies held votes on the frequency of say-on-pay proposals. While shareholders preferred annual say-on-pay votes at 80 percent of companies in 2011, they preferred annual votes at well above 90 percent of companies this year.

7. Despite the increased shareholder interest in annual say-on-pay votes, the median say-on-pay vote result at Russell 3000 companies remained quite high—96.4 percent, a slight uptick from 2016’s median outcome of 96%.

8. Shareholder rights continue to receive focus. One example is companies’ steady march from plurality vote standards in uncontested director elections to majority vote standards.

Proxy Season: How Retail & Institutional Investors Voted

This 6-page memo from Broadridge & PwC takes a closer look at common shareholder proposals for this proxy season – and highlights that institutional investors drove approval of trending ESG issues. For example, institutional investors voted 66% of their shares in favor of climate change proposals, compared to 13% support among retail shares.

Liz Dunshee