Performance Metrics: Accelerating the Stakeholder Model

When the Business Roundtable announced their “new” commitment to “stakeholders,” we said it was not meaningful unless we saw incentive compensation aligned to specific stakeholder goals. At the Harvard Law School Forum on Corporate Governance and Financial Regulation, Equilar research analyst Connor Doyle looks at current incentive plans tied to goals other than the traditional…

Proposed Legislation: Tax excessive CEO pay

The Tax Excessive CEO Pay Act, introduced by Senator Bernie Sanders and Representatives Barbara Lee and Rashida Tlaib, would raise the corporate tax rate for any companies that pay their executive 50 times more than their typical workers. The bill begins with a 0.5 percent tax. The worst offending companies that pay their CEO more…

CEO PAY: TRICK OR TREAT? – MSCI

Our previous research shows that CEO pay plans may have been misaligned with long-term shareholder returns. The Council of Institutional Investors now is focusing on this topic. Over the past several proxy seasons, institutional investor sentiment on executive pay has become more negative, particularly among select large European asset owners and some of the most…

Why CEOs are paid so much – CNN

Most big public companies are now required to provide shareholders with a vote on CEO compensation under the SEC’s Say-on-Pay rule. The vote results are not binding, so don’t require the board to take action. But they do let boards know how shareholders feel about the issue. The rule has only been in effect for…

WeWork Employee Options Underwater as Ex-CEO Reaps – WSJ

VEA Vice Chair Nell Minow is quoted in the Wall Street Journal about the mind-boggling $1.7 billion departure package for Adam Neumann at We Work, which includes $187 million in consulting fees and a $500 million line of credit. “There used to be crazy departure packages in the past, and shareholders really objected,” said Nell…

CalPERS Votes Against Pay at 1,195 Firms – Corporate Governance

Jim McRitchie reports on CalPERS votes against pay plans: Equilar announced, in partnership with CalPERS, the release of the CalPERS P4P Scorecard in Equilar Insight, the leading executive compensation benchmarking software solution. The release of the new scorecard is an extension of the five-year realizable pay calculation CalPERS and Equilar released earlier this year. Said…

European investors target lavish executive pay in US

Pay deals for top company bosses in the US face mounting opposition from some of Europe’s most influential investors even as their large American counterparts continue to provide solid support for exorbitant executive remuneration packages. The investment arms of UBS, Axa, Legal & General, BNP Paribas along with APG, Europe’s largest pension fund, voted against…

Will Comp Committees Factor in ESG?

At the Harvard Law School Forum on Corporate Governance and Financial Regulation, Don Delves, Robert Newbury, Ryan Resch, of compensation consultants Willis Towers Watson write about efforts to factor in ESG goals in incentive compensation. Since we have said that our evaluation of the new focus on stakeholders will depend in part on how pay…