Pay Governance LLC is an independent firm that serves as a trusted advisor on executive compensation matters.
Our work helps to ensure that our clients' executive rewards programs are strongly aligned with performance and
supportive of appropriate corporate governance practices.
The Advisors’ Blog February 27th issue features our Viewpoint, “The Compensation Committee: What’s in a Name?”, by John England and Peter England. To qualify for the performance-based compensation exception under Section 162(m), payment of the compensation must meet several requirements, … Continue reading →
Companies have migrated a significant portion of equity compensation to performance-based long-term incentive (LTI) awards—typically performance shares or stock units (PSUs)—from stock options. Over 80% of companies in the S&P 500 now have such plans; these also now comprise the majority weighting among LTI vehicles. This trend has been driven in, large part, by the desire of Compensation Committees to place at least one-half equity compensation in the form of “performance-based” pay as defined by the proxy advisory firms. Continue reading →
As shareholders of U.S. public companies demand more accountability for performance, Boards are under increased pressure to continue to strengthen the P4P linkage of their incentive compensation plans. In a 2013 survey of Compensation Committee members co-sponsored by the NYSE, Conference Board, and Pay Governance, the top 3 “challenges” that Committees stated they were facing involved incentive pay and performance goal setting. Continue reading →
Perhaps the most controversial rule regarding executive compensation in the Dodd-Frank Financial Reform legislation is the CEO pay ratio disclosure. This rule requires disclosure of the CEO’s pay to that of the company’s median employee. The SEC adopted final rules regarding the pay ratio disclosure requirement in calendar year 2015, and the requirement is scheduled to take effect with proxies filed in 2018. Continue reading →
February 10, 2017 Lower Performance Targets in Focus Ahead of Proxy Season – Almost two in 10 firms set lower year-over-year performance targets for 2016 – which could irk shareholders. Click the link to be re-directed to Agenda Week and … Continue reading →
The Corporate Governance Advisor’s July/August 2016 issue features our Viewpoint, “Gender Pay Equity In Focus”, by Jon Weinstein and Ashley Meischeid. This year’s Equal Pay Day (April 12, 2016) produced an extraordinary volume of discourse and disclosure on a vitally … Continue reading →
CEO pay continues to be a widely debated topic in the media, within the government, and in the boardroom among investors and proxy advisors. As the U.S. was in the heart of the financial crisis in 2008 – 2009, CEO total direct compensation (TDC = base salary + actual bonus paid + value of long-term incentives) dropped for two consecutive years. As the U.S. stock market sharply rebounded and the economy started to slowly grow again, CEO pay also rebounded. Large pay increases occurred in 2010, primarily in the form of larger long-term incentive (LTI) grants. Since then, year-over-year increases have been fairly moderate – in the 2% to 6% range for the period 2011-2015. Continue reading →
A new Equilar report featuring commentary from Pay Governance and Donnelley Financial Solutions analyzes the compensation discussion and analysis (CD&A) section of S&P 100 proxy statements over the last five years. With the average CD&A reaching nearly 10,000 words, the report revealed key strategies in how companies design and communicate pay practices by using alternative pay graphs, checklists and other visualizations that help draw investors to the most important information.
To be redirected to Equilar and download a copy of this important report, click here.
Matt Quarles has joined the firm as a Partner. In this role, Quarles is responsible for working with clients across industries on a wide range of executive compensation issues. He will be based in Los Angeles and has nearly 20 years experience in the executive compensation consulting industry.
Pay Energy®, a new proprietary assessment tool developed by Pay Governance
Pay Energy®, a new proprietary assessment tool developed by Pay Governance LLC, helps companies consider the “drive, discipline and speed” inherent in current programs and in alternative designs that may be evaluated.
“The fundamental philosophy of executive compensation is to ‘attract, retain and motivate’ a talented management team. So it’s concerning when you hear incentive awards are just put in desk drawers until plans mature,” said Pay Governance managing partner John England.