A new report from ISS finds that CEO pay plans that get the highest “no” votes from shareholders are more likely to be less diverse. In other words, boards with more diversity are less likely to propose CEO pay plans that shareholders deem excessive.

Interestingly, it was not just high-profile, large companies that were the target of shareholder disapproval. Among the S&P 500, S&P 400, S&P 600, and Russell 3000 excluding the S&P 1500, the greatest number of companies that failed to receive a majority of support for their Say on Pay resolution in 2021 were in the S&P 500, at 18 companies, or 3.6 percent of the index, but the other failed votes were among much smaller companies. By percentage, we see a similar proportion to that found in the S&P 500 in the S&P 400, where 15 companies, representing 3.8 percent, of the index failed to garner majority support for their Say on Pay proposal. Fewer companies failed to receive majority support in the Russell 3000 excluding the S&P 1500 (9.3 percent or 14 companies), with just 11, or 1.8 percent, failed proposals in the S&P 600.