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 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 →
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. Continue reading →
In the first 3 months of 2017, our firm’s partners and consulting staff attended more than 200 corporate Boards of Directors compensation committee meetings in our role as executive compensation advisors. From attending these meetings, we have learned a great deal about certain issues emerging as dominant themes in Board discussions about executive pay and corporate governance. 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 recent years, the SEC has developed extensive rules and regulations regarding the reporting of executive compensation in the company annual proxy. Such reporting includes the narrative discussion of CD&A executive compensation policies and practices as they pertain to the CEO and NEOs. Additionally, the SEC requires that companies provide numerous prescribed tables and schedules reporting the historical elements of executive pay for the most recently completed fiscal year as well as the past 2 fiscal years. Continue reading →
The rise in both the prevalence and prominence of long-term performance plans has been one of the most significant trends in executive compensation over the past 15 years. At the time of the dot-com market collapse (March 2000 to October 2002) and the demise of several prominent U.S. companies (e.g., the Enron scandal revealed in October 2001), long-term performance plans were only used by a relatively small portion of large U.S. public companies. 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 →
There has been a massive shift in how outside Board Directors have been paid over the past 20 years. This has largely been fueled by changes in corporate governance practices over time. Overall, the shift has been away from paying Directors like executives and towards paying outside experts for their time and contributions during their term of service. 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 →
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.
October 4, 2016
Pay Governance Adds New West Coast Partner
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.
“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.