2018.09.25 CalPERS, Executive Compensation, and ... Elizabeth Taylor! These three may seem like strange bedfellows, but the nexus comes from this truism about executive compensation: shareholder outrage erupts in down markets, and evaporates during booms. Witness for example the efforts of CalPERS to awaken some pay-for-performance alignment. For the years 2011 through 2017, CalPERS is reported to have voted "no" for say-on-pay about 16% of the time. In 2018, that "no" vote percentage leapt to 43% with CalPERS explaining that this was primarily due to a misalignment between executive pay and corporate performance. Meanwhile, the "up" market has found 95% shareholder support for companies with "for" recommendations, and 73% for companies passing with an “against” recommendation (per a 12/2017 FW Cook report). All of this brings to mind Elizabeth Taylor's quote: "there is no deodorant like success." As year-end 2018 approaches, the best boards will heed the call to better align pay-to-performance. Otherwise, they will be vulnerable when a stall in the stock market makes their executive compensation plans fail the smell test.
2012.Feb.14 SEC re Say on Pay Proposal Text for Voting Cards and Instructions. The SEC has issued guidance about how proxy cards and voting instructions should describe the say-on-pay vote. The top four bullets provide examples of approved language, and the bullet in the last line illustrates an inadequate description (because of its ambiguity). See CD&I 169.07.
Topics relating to Say on Pay
Binding Say on Pay (meaning the shareholder vote becomes binding on company boards and executives)