Current Pay Governance Viewpoints

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  The CEO Pay Ratio Beyond Dodd Frank: Live and Local

  By Jon Weinstein and Blaine Martin

  Spring is in the air, and executive compensation consultants are busy reading a cascade of public filings and proxy advisor reports as we analyze and are asked to predict trends in executive pay in 2017 and beyond. One of the most common questions in executive compensation this year concerns what will become of the Dodd-Frank mandated CEO pay ratio set to be disclosed publicly for most companies beginning with proxies filed in 2018 – if not delayed or overturned beforehand. Earlier this year, acting Securities and Exchange Commission (SEC) Chair Michael Piwowar took the unusual step of requesting additional comments on the cost and burden of complying with the already approved CEO pay ratio rule, which would require companies to disclose the ratio of CEO pay to that of the median employee. Read More
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  Assessing ISS' Newly Selected GAAP Financial Metrics for CEO P4P Alignment: How Can Companies Respond?

  By Ira T. Kay, Marizu Madu and Linda Pappas

  Say on Pay (SOP) and shareholder advisor vote recommendations have caused a dramatic increase in the use of relative total shareholder return (TSR) as a long-term incentive (LTI) plan performance metric. Read More
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  Potential Regulatory Relief – Financial CHOICE Act 2.0

  By John R. Ellerman

  The CHOICE Act is designed to rewrite many of the rules and provisions contained in the Dodd-Frank Wall Street Reform and Consumer Protect Act (“Dodd-Frank”). The proposed legislation was passed on a party-line vote of 34-26 and has advanced to the full House for a vote at some future date. The legislation is expected to pass the House due to its Republican majority. Read More
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  Over the Long Term, Companies with Problematic Pay Practices Generally Perform Worse than Companies that Avoid Problematic Pay Practices

  By Andrew Winkler, Brian Johnson and Christine Oberholzer Skizas

  Since advisory Say on Pay (“SOP”) votes became effective in 2011, ISS and Glass Lewis have exerted significant influence over the vote outcomes for these proposals. These advisors use quantitative tests to assess CEO Pay for Performance (“P4P”) alignment and supplement those quantitative assessments with a qualitative review of pay practices/program design. Read More