2017 Proxy Season Review: Compensation
ISS published its annual post-season report on compensation results and trends last month, and this article from Harvard Law School Forum on Corporate Governance and Financial Regulation summarizes their findings. Here are some main points:
- Say-on-pay support reached its highest levels.
- The severity of pay-for-performance misalignment correlates with ISS vote recommendations.
- Median S&P 500 CEO pay reached its highest point since the say-on-pay rule took effect in 2011, pay at smaller companies was flat.
- Discretionary bonuses continued to decline.
- Appreciation awards continue to decline in popularity.
- Performance-conditioned equity is the prevailing practice.
- Say-on-pay frequency votes returned; annual frequency favored by boards and investors.
- Problematic pay practices are generally declining.
- Golden parachute failure rate doubled as average shareholder support fell.
- Equity plan support levels were essentially flat.
- The number of shareholder proposals on compensation plummeted.