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.
While U.S. companies are addressing the new requirement to report CEO pay ratio statistics to shareholders, U.K. companies are now required to report statistics on the gender pay gap. Such reporting is mandated for no later than April 4, 2018, and the reporting must occur on the company’s public-facing website and submitted directly to the government using its dedicated online reporting service. Such reporting is in direct response to the U.K. Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. Continue reading →
Talent retention is one of the executive pay program’s most important objectives. In order to minimize situations when retention is an issue with the pay program-rather than one of its characteristics-it is important to ensure the core elements are well designed and operating effectively. A strong pay program foundation includes target pay opportunities at market-competitive levels, incentive plans understood by participants, and payouts commensurate with performance. Continue reading →
With the introduction of say-on-pay (SOP) in 2011 and the increased clout of proxy advisory firms on executive compensation program designs, the performance share unit (PSU) has become a common feature of executive long-term incentive (LTI) programs among U.S. public companies. Continue reading →
If current legislation and SEC rulemaking stand, one big story in public company executive compensation during the 2018 proxy season will be the disclosure of the “CEO Pay Ratio.” Beginning for reporting periods starting on or after January 1, 2017 (spring 2018 proxy filings), companies will be required to disclose the median of employee pay excluding the CEO, CEO pay, and the ratio between the two. 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 →
At a recent Compensation Committee meeting, a director remarked, “As we discuss our CEO’s target compensation for next year, we need to remember that there is an ongoing debate about income inequality.” Income inequality and executive compensation are two of the most controversial issues in modern American economic and political discourse. The forthcoming mandated disclosure of the CEO pay ratio will link these two issues directly in the boardroom.
How much of the increase in inequality has been caused by CEO pay, and is this a failure of corporate governance?
This Viewpoint will provide some insights for directors and others into the answers to these questions in the context of the SEC’s mandated disclosure of the ratio of CEO to median employee pay. Continue reading →
Ira Kay and Blaine Martin authored an opinion piece in this week’s Agenda. The article highlights our research on ISS recommendations and TSR. Click here to read the article.
Pay Governance Gives Back
Very happy and rewarding day for the Pittsburgh crew. Today the Pay Governance Pittsburgh office contributed 12 frozen Turkeys to the Washington County City Mission in support to its drive to feed local families in need. This follows the team’s volunteering of time to serve meals to the Mission’s residents, contributing extra firm computers to the Mission’s Education and Training Center, and working to enhance this non-profit’s governance structure on a pro-bono basis.
2017 Leading Minds of Compensation, East featuring Diane Lerner, Managing Partner at Pay Governance
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.
Upcoming PG Events
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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.
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.