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.
As we approach the 2018 proxy season, a key change for companies will be the first publication of the CEO Pay Ratio as mandated by the Dodd-Frank Act of 2010. Companies will begin publishing CEO Pay Ratios in proxy statements in early 2018. Continue reading →
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. Continue reading →
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. Continue reading →
In the aftermath of the failed Affordable Care Act (“Obamacare”) repeal and replace effort, the United States’ new administration announced its intent to shift focus to other high-priority issues. As noted in the latest press accounts, President Trump is anxious to tackle a comprehensive rewrite of the Tax Code. Continue reading →
In the Dodd-Frank Act legislation after the 2008 Financial Crisis, the inclusion of shareholder SOP voting was driven by bipartisan Congressional support to “control executive compensation…” at corporations. In 2009, a former SEC chief accountant said, “Executive compensation at this point in time has gotten woefully out of hand… The time to adopt ‘say on pay’ type legislation is certainly past due.” Politicians, regulators, and some institutional shareholders clearly thought that, “The impetus for passage of Dodd-Frank’s say-on-pay requirement in 2011 focused on remedying ‘excessive’ CEO pay.” 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 →
On April 29, 2015, the SEC released proposed rules on public company pay-for-performance disclosure mandated under the Dodd-Frank Act. Pay Governance has analyzed the proposed rules and the implications for our clients’ proxy disclosures and pay-for-performance explanations to investors. We are concerned about the validity of describing a company’s pay-for-performance alignment using the disclosure mandated under the SEC’s proposed rules, and its implications for Say on Pay votes. Continue reading →
The Securities and Exchange Commission (SEC) has just released its proposed rules regarding the requirement for companies to report as to whether employees and non-employee directors are allowed to hedge or offset the decrease in market value of equity securities. Proxy advisory firm Institutional Shareholder Services (ISS) has just released a new document explaining the firm’s latest policies with respect to executive compensation, including its say on pay advisory voting services. Another proxy advisory firm, Glass, Lewis & Co. LLC (Glass Lewis), has implemented changes to its pay for performance and equity plan models. Continue reading →
In the three years that U.S. public companies have held non-binding Say on Pay (SOP) votes under the Dodd Frank Act, compensation committees, compensation advisors, and financial regulators have seen the clout of Institutional Shareholder Services (ISS) increase dramatically in the executive compensation arena. Continue reading →
The CEO pay ratio, a previously outstanding major regulation mandated by Dodd-Frank, now has proposed rules. The SEC voted 3-2 Wednesday, September 18th, to propose rules that will require most public companies to disclose how their CEO's compensation compares with … 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.