Less Diversity On Boards Leads to More CEO Overpayment

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 proposed CEO pay plans that shareholders deem excessive. Interestingly, it was not just high-profile, large companies that were the…

Agenda – Glass Lewis Raises the Bar on E+S Incentive Metrics

Proxy advisor Glass Lewis wants companies to offer more robust disclosure about their use of environmental and social incentive metrics, according to the firm’s 2022 proxy voting guidelines. While Glass Lewis won’t require the use of these metrics, it will consider them in say-on-pay analyses. Agenda – Glass Lewis Raises the Bar on E+S Incentive…

Agenda – SEC Nabs Another Company for Failure to Disclose Perks

Memo to boards: You pay them plenty. Let them pay for their own plane rides and credit card purchases. Last week, the SEC settled charges with Texas oilfield company ProPetro Holding Corp. and its former CEO for not properly disclosing hundreds of thousands of dollars’ worth of perquisites, including personal use of the company airplane…

Agenda – ESG Metrics Not Enough to Drive ‘Real Change,’ Say Experts

As S&P 500 companies increasingly move to tie executive compensation to environmental, social and governance metrics, experts caution that pay incentives alone cannot drive the changes needed for companies to attain their ESG goals. More than half (57%) of S&P 500 companies, such as investment management company T. Rowe Price, Valero Energy and health insurance…

Agenda – Incentive Pay Under Fire

Sen. Elizabeth Warren (D-Mass.) has Wells Fargo & Co. in her cross hairs again. Last week newly elected board chair Stephen Black received a letter from the Massachusetts senator asking for details on CEO Charles Scharf’s compensation incentives, including specific metrics regarding governance and regulatory compliance targets and Scharf’s performance against them. On the same…

Agenda – Investors Ask: Are CEOs Special Enough for Special Awards?

Note to boards: Consider the diminishing marginal returns of incentive grants on top of incentive grants. You should not have to bribe a CEO to stay in the job. Companies in the industries hardest hit by the pandemic granted extra long-term incentive awards to executives last year, according to a report from Compensation Advisory Partners….

An Unpersuasive Argument Against ESG Targets in Executive Compensation

In the Wall Street Journal, Alex Edmans argues against ESG targets in incentive compensation. Here’s why he’s wrong (but a little right). He is a little bit right in saying that “The evidence shows that paying for targets encourages executives to hit those targets. But it doesn’t necessarily encourage them to improve performance. The crux…