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.
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 →
Executive pay continues to be a hotly debated topic in the boardroom among investors and proxy advisors, and it routinely makes headlines in the media. 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 + grant value of long-term incentives) dropped for two consecutive years. Continue reading →
Sustainable investing – defined as an investment approach that considers environmental, social, and governance (ESG) factors in the selection and management of investments – has seen significant growth in assets under management in the past several years. In the United States, an estimated 11% of total assets under management are now invested based on sustainable investment strategies. Similarly, shareholder proposals relating to environmental or social issues represented one-third of all shareholder proposals in 2014, representing an increase of nearly 40% since 2009. Some proposals are receiving shareholder support at or above 30%, generally driven by “for” vote recommendations from ISS. We find that ISS favors proposals that seek additional environmental or social reporting versus proposals that seek operational changes or restrictions. This finding contrasts with ISS’s say-on-pay vote recommendation policies, which often seek changes to executive compensation designs. Continue reading →
Over the past 15 years, the methods of compensating non-employee directors have changed in tandem with the risk and workload of being a director. The catalyst for change over this time period includes a variety of regulatory requirements, such as Sarbanes-Oxley and Dodd Frank, enhanced proxy disclosure rules and increases in shareholder activism. By way of examples, Audit Committees meet more frequently and must have at least one qualified financial expert, and Compensation Committees have greater workloads. Today’s corporate director needs to dedicate more time to the job, assume greater risk, and meet higher qualification standards. 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.