The following excerpt was taken from a Harvard Business Review article in March of 2017. How do you think boards should evaluate themselves? "The New York Stock Exchange requires that the boards of all publicly traded corporations conduct a self-evaluation at least annually to...
Reconsideration of Pay Ratio Rule Implementation
"The Commission adopted the pay ratio disclosure rule in August 2015 to implement Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The rule requires a public company to disclose the ratio of the median of the annual total compensation of all...
Paul Gryglewicz Article Discusses Say on Pay & the Need for Better Shareholder Engagement
Paul Gryglewicz, a senior advisor at Global Governance Advisors, shares his thoughts and advice on how to increase shareholder engagement in preparation for Say on Pay votes. "2017 marks a milestone year in terms of Say on Pay in the United States, as the first six-year 'say...
Board of Directors Pay: Rewarding for Expertise
"Board of Directors pay continues its upward trend according to a study published by Total Compensation Solutions (TCS). The Board compensation report shows increases of approximately 7 to 8 percent from last year for annual retainers for the Chairman, and Regular Board Members...
Incentive Plan Payouts Prove Effective Pay for Performance
Companies, shareholders and boards of directors want to ensure alignment of pay and performance to justify the often-high accompanying price tag of executive compensation. To provide context on the correlations between awarded, realizable and actual pay earned under...
Are Top Investors Listening to Proxy Advisors on Pay?
An interesting topic to discuss from an article on Value Walk, highlighting the distance between ISS and say on pay recommendations under certain conditions. Although there is a high percentage of correlation between investor voting and ISS, the percentage declines dramatically...
2017 Agenda: Priorities for Boards, Audit Committees and Private Companies
"Political swings, global volatility, technology innovations and investor expectations will require deeper board engagement. Drawing on interactions with corporate directors and business leaders as well as insights from its research, the KPMG Board Leadership Center has...
Golden Leash Rule, Say-on-Pay, Form 10-K Summaries: Proxy Season Guide to 2017
Check out this interesting read regarding the new say on pay rules, form 10-k summaries, and a guide for proxy season. "As another year comes to a close, it is time for public companies to become acquainted with the securities law and business developments of the past year...
2017 Board of Directors Predictions: 5 Trends to Watch
"2016 was a year marked by significant changes—stunning political upheavals via Brexit and our own controversial new President-elect; a growing number of big-ticket, multi billion dollar M&A deals amid massive enterprise court battles, particularly in the technology...
Short-Term Incentive Pay Criteria Are Shifting
"The criteria for earning short-term incentive (STI) compensation appear to have entered a state of flux, judging by new research from the CFO Alliance. In particular, some companies are putting non-financial metrics, like customer or employee satisfaction, into the mix. But far...
ISS U.S. Frequently Asked Questions are Published
ISS has published the U.S. Frequently Asked Questions for Equity Plan Compensation, Executive Compensation, Pay-for-Performance Mechanics, and U.S. Peer Selection (available here). In addition, an updated PFP white paper to reflect the new financial performance alignment test...
3 Questions (Answered) at Equilar’s Compensation Committee Forum
"Equilar’s Compensation Committee Forum covered topics from regulatory updates to peer group selection and Say on Pay. The realm of executive and director pay is a tumultuous one. Whether preparing for the impending CEO Pay Ratio or anticipating the regulatory changes ahead,...
Middle Market CEO & CFO Pay Increases Show Momentum in BDO Study
2015 middle market executive compensation trends foreshadowed momentum companies are seeing in 2016. In Q2, the National Center for the Middle Market reported 7.2 percent revenue growth over the previous year, and while companies entered the year with some caution, 2015 pay...
The Future of Compensation & Corporate Governance Amid a Trump Presidency
One thing is for certain, the results of the election created a myriad of questions regarding the future of American politics. Less certain, though, is the level of impact the results will have on the futures of various executive compensation and corporate governance policies...
NFPCC Original Article: The Future of Compensation and Corporate Governance Amid a Trump Presidency
One thing is for certain, the results of the election created a myriad of questions regarding the future of American politics. Less certain, though, is the level of impact the results will have on the futures of various executive compensation and corporate governance policies...
Apple Must Include Shareholder Proposal on Executive Compensation in Proxy
"Late last month, the SEC issued (and this month it posted) a No-Action Letter rejecting Apple’s attempt to exclude a shareholder proposal on executive compensation. The proposal was an odd one, with a quirky supporting statement, apparently submitted by a retail investors on...
Bank Compensation: How Banks are Changing Bonus Plans
"The problem with creating an incentive plan is that your employees just might do whatever you incentivize them to do. If you pay bonuses based solely on earnings growth, then you might not only get growth in earnings but also really bad loans that eventually sink the bank. If...
High Time to Sharpen Executive Pay Clawbacks
"Whether you’re looking at a mutual fund or company stock, you want to see the management team having a significant amount of their own 'skin in the game' through a large commitment of personal financial resources. While this doesn’t guarantee success, at least you know the...
SEC Releases New Interpretations on CEO Pay Ratio Disclosure
On October 18, 2016, the staff of the Division of Corporation Finance of the Securities and Exchange Commission published five new Compliance & Disclosure Interpretations (CDIs) related to CEO pay ratio disclosures. The CDIs provide some clarity on how companies can begin...
Hot Topics in Executive Compensation
Here are some trending hot topics in executive compensation, written by Brad Smith at Findley...
ISS Survey Results Regarding Pay-for-Performance and Say-on-Pay Frequency
Institutional Shareholder Services Inc. (“ISS”), the influential proxy advisory firm, recently released their 2016-2017 Global Policy Survey results. These results show some interesting findings related to executive compensation and may signal the future of ISS policies...
UPCOMING PRESENTATION: Turning Carrots into Karats for Millennials & Baby Boomers
This presentation by NFP Compensation Consulting will identify the differences of today's workforce with four very different generations of Workers: Baby boomers, Gen X, Millennials & Gen Z. The discussion will include what motivates the different generations along with the...
Preparing for CEO Pay Ratio Disclosures
"Public companies in the U.S. will be required to disclose the ratio of CEO pay to median employee pay in their 2018 proxy statements—reporting on fiscal year 2017—and many are already working through the calculations involved. Prudent companies are also considering the...
Fearing lawsuits, U.S. banks set limits for director pay
"Over the past two years, a growing number of U.S. banks has capped their directors' earnings, but the ceilings are so high that they primarily serve to fend off potential shareholder litigation rather than control the pace of pay increases. Most of the caps are typically 2-3...
Why Basing Executive Compensation on a Formula Doesn’t Work
We want to share a Wall Street Journal article entitled, "Why Basing Executive Compensation on a Formula Doesn’t Work," that supports our message to clients that a formula isn’t the “end all, be all” approach for executive...
Top CFOs’ Pay Rises 18.7% to 3.4 Million Since 2011
We would like to share an article by Matthew Heller that discusses an Equilar survey that found CFO pay growth at S&P 500 firms is outpacing that of CEOs and performance-based equity is gaining...
EpiPen Maker Dispenses Outsize Pay
In this Wall Street Journal article entitled, "EpiPen Maker Dispenses Outsize Pay", the author points out potential excessive pay (based on peer group) and aligning business decisions purely due to desired achievement of incentive plans versus company profits. Here is a...
CEO Pay and the Rise of Relative Performance Contracts: A Question of Governance?
Written by Brian Bell and John Van Reenen "Would moving to relative performance contracts improve the alignment between CEO pay and performance? To address this we exploit the large rise in relative performance awards and the share of equity pay in the UK over the last two...
NFPCC’s Analysis for Houston Chronicle Mentioned in SA Article About Executive Pay
Last week, the analysis we conducted for the Houston Chronicle (regarding compensation among the highest paid executives of Houston's publicly traded companies) was mentioned in an article on MySanAntonio.com entitled, "Executive Pay Still Rising Despite Energy's...
ISS Survey: 2017 Policy Updates
As this Gibson Dunn blog states, ISS has posted its annual policy survey (here). The deadline is August 29th, and the big topics include: Dual-Class Companies, Say-on-Frequency, Pay-For-Performance & Non-TSR Financial Metrics, Director Tenure & Refreshment, and...
Analysis by NFPCC: The 100 Highest-paid CEOs in Dallas-Fort Worth
Each year, we here at NFP Compensation Consulting conduct an analysis for the Dallas Morning News on the top 100 highest-paid CEOs in the Dallas - Fort Worth area. Read...
Beware: Binding Say on Pay, May Pay the CEO more.
Four recent, independent articles paint an interesting picture on the topic of binding Say on Pay votes. 1. The UK’s potential new prime minister, post Brexit, could move to a binding Say on Pay vote to curb CEO pay (read more here). 2. A recent article by Fortune, suggests...
What do Disney and Yahoo have in Common?
An interesting read on Compensation Litigation! History may not always repeat itself but often times, rhymes. The Delaware Court of Chancery has issued an opinion on a Section 220 demand made against Yahoo which is very similar to the Disney case several years back. Disney...
SEC’s Proposed Rules Requiring Member Companies to “Clawback” Excess Incentive-Based Compensation
SEC's Proposed Rules Requiring Member Companies to "Clawback" Excess Incentive-Based Compensation Article Written by Fulcrum Partners LLC MARKET TREND: There continues to be serious concern among regulators over the compensation of certain public company executives. The SEC's...
Chipotle Shareholder Overreach
It doesn’t always feel like it, but shareholder votes on executive compensation are actually non-binding. Today, it seems that shareholders’ voices are growing more and more influential and their “non-binding” votes are wielding more and more power. And unfortunately,...
Executive Pay Topics for 2011 Proxy | March 2011
The increased scrutiny of executive compensation, resulting from both recently passed and pending legislation, as well as shareholder advisory group policies, will require regular updates to public company’s Compensation Committees. Although there are many issues that will...
After The Restoring American Financial Stability Act (H.R. 4173)
Compensation Committee Action Plan Review the compensation committee charter for sound governance practices. Review the process for determining executive compensation. Conduct an analysis of institutional shareholders to determine which of them follow voting guidelines...
Less Freedom to Pay: Executive Comp After Financial Regulatory Reform
Click the link to the NFP Compensation Consulting article posted to SHRM Online - Less Freedom to Pay: Executive Comp After Financial Regulatory Reform. Say on Pay The “say-on-pay” provision included in the bill would give shareholders the opportunity to cast an advisory...