ROCKVILLE, Md. (May 18, 2022) – Corporate advisory pay votes, known colloquially as “say-on-pay,” so far this year have received the lowest level of median investor support at S&P 500 companies since votes became mandatory in 2011, according to an analysis by ISS Corporate Solutions (ICS), which helps companies design and manage corporate governance, executive compensation, and sustainability programs that align with company goals, reduce risk, and manage the needs of a diverse shareholder base.
According to the analysis, median investor support for say-on-pay proposals at S&P 500 companies currently stands at 92.2 percent through May 9, down from 92.7 percent throughout last year, and 94.1 percent throughout 2019, prior to the pandemic. Meanwhile, the median S&P 500 chief executive’s pay reported through May 9, has jumped nine percent to a record $14.4 million, up from $13.2 million in 2020, the analysis finds.
“These results potentially suggest a continued growing disconnect between board determinations of CEO compensation opportunities and shareholders’ support for the pay packages,” said ICS Executive Director, Brian Johnson. “Against the backdrop of the current inflationary environment, investors appear to be more inclined than ever to vote against large pay packages that aren’t justified by company performance.”
The ICS analysis notes that the S&P 500 CEO pay increases were largely driven by significantly higher bonus payouts in filing year 2022 relative to filing year 2021 and continued increases in long-term incentive grant values for executives. The ICS analysis further highlights that even though S&P 500 CEO pay levels remained essentially flat in filing year 2021, investors nevertheless rejected say-on-pay proposals during the 2021 proxy season at a then historic rate, with a record 20 S&P 500 companies failing to secure majority support for their say-on-pay proposals. This year, the figure stands at eight through May 9, with more vote results yet to come.
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About ISS Corporate Solutions
Companies turn to ISS Corporate Solutions, Inc. (“ICS”) for expertise in designing and managing corporate governance, executive compensation, and sustainability programs that align with company goals, reduce risk, and manage the needs of a diverse shareholder base by delivering best-in-class data, tools, and advisory services. Our global client base extends to companies located across North America, Europe, and Asia. ICS is a wholly owned subsidiary of Institutional Shareholder Services Inc. (“ISS”) and is headquartered in Rockville, Maryland. ISS’ Global Research Department, which is separate from ICS, will not give preferential treatment to, and is under no obligation to support, any proxy proposal of a company (whether or not that company has purchased products or services from ICS). Similarly, ISS’ responsible investment research and analytics teams will not provide preferential treatment to, and is under no obligation to provide a favorable rating, assessment and/or any other favorable result to any corporate issuer (whether or not that corporate issuer has purchased products or services from ICS). No statement from an employee of ICS should be construed as a guarantee that ISS will (a) recommend that is clients vote in favor of any particular proxy proposal nor (b) provide a favorable rating or other assessment of any corporate issuer. For more information, please visit www.isscorporatesolutions.com.
Media Contact:
Sarah Ball
Executive Director
Institutional Shareholder Services, Inc.
44-203-192-5728
sarah.ball@issgovernance.com
Investor Support for Say-on-Pay Proposals Wanes as S&P 500 CEO Pay Jumps
ROCKVILLE, Md. (May 18, 2022) – Corporate advisory pay votes, known colloquially as “say-on-pay,” so far this year have received the lowest level of median investor support at S&P 500 companies since votes became mandatory in 2011, according to an analysis by ISS Corporate Solutions (ICS), which helps companies design and manage corporate governance, executive compensation, and sustainability programs that align with company goals, reduce risk, and manage the needs of a diverse shareholder base.
According to the analysis, median investor support for say-on-pay proposals at S&P 500 companies currently stands at 92.2 percent through May 9, down from 92.7 percent throughout last year, and 94.1 percent throughout 2019, prior to the pandemic. Meanwhile, the median S&P 500 chief executive’s pay reported through May 9, has jumped nine percent to a record $14.4 million, up from $13.2 million in 2020, the analysis finds.
“These results potentially suggest a continued growing disconnect between board determinations of CEO compensation opportunities and shareholders’ support for the pay packages,” said ICS Executive Director, Brian Johnson. “Against the backdrop of the current inflationary environment, investors appear to be more inclined than ever to vote against large pay packages that aren’t justified by company performance.”
The ICS analysis notes that the S&P 500 CEO pay increases were largely driven by significantly higher bonus payouts in filing year 2022 relative to filing year 2021 and continued increases in long-term incentive grant values for executives. The ICS analysis further highlights that even though S&P 500 CEO pay levels remained essentially flat in filing year 2021, investors nevertheless rejected say-on-pay proposals during the 2021 proxy season at a then historic rate, with a record 20 S&P 500 companies failing to secure majority support for their say-on-pay proposals. This year, the figure stands at eight through May 9, with more vote results yet to come.
###
About ISS Corporate Solutions
Companies turn to ISS Corporate Solutions, Inc. (“ICS”) for expertise in designing and managing corporate governance, executive compensation, and sustainability programs that align with company goals, reduce risk, and manage the needs of a diverse shareholder base by delivering best-in-class data, tools, and advisory services. Our global client base extends to companies located across North America, Europe, and Asia. ICS is a wholly owned subsidiary of Institutional Shareholder Services Inc. (“ISS”) and is headquartered in Rockville, Maryland. ISS’ Global Research Department, which is separate from ICS, will not give preferential treatment to, and is under no obligation to support, any proxy proposal of a company (whether or not that company has purchased products or services from ICS). Similarly, ISS’ responsible investment research and analytics teams will not provide preferential treatment to, and is under no obligation to provide a favorable rating, assessment and/or any other favorable result to any corporate issuer (whether or not that corporate issuer has purchased products or services from ICS). No statement from an employee of ICS should be construed as a guarantee that ISS will (a) recommend that is clients vote in favor of any particular proxy proposal nor (b) provide a favorable rating or other assessment of any corporate issuer. For more information, please visit www.isscorporatesolutions.com.
Media Contact:
Sarah Ball
Executive Director
Institutional Shareholder Services, Inc.
44-203-192-5728
sarah.ball@issgovernance.com
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