Director Data Annual Report 2019
By Directors and Boards

Trends for the 2019 Proxy Season

Shareholder voting during 1,024 meetings held during the “mini-season” between July 1 and Dec. 31, 2018 provides a window into what’s in store for the 2019 proxy season. A total of 3,637 directors stood for election this past season — 143 of them failed to receive majority support and 428 directors failed to attain at least 70% support, a threshold monitored by some proxy advisors.

Source: ProxyPulse, Broadridge and PwC

 

 

 

 

 

The Board’s Sustainability Responsibility

There is little unanimity at the board level when it comes to where the buck stops for environmental sustainability. Less than half of directors surveyed said environmental and sustainability issues are formally overseen at the board level. More specifically, 20% of respondents reported that their full board has a formal mandate covering environmental and sustainability issues, and 30% reported that a board committee is responsible for it.

Source: Diligent Institute: “Winds of Change: Environmental Sustainability Rises to the Board Level”

 

Long-term Incentives a Bigger Part of CEO Paychecks

Short- and long-term incentives grew by 7.5% in 2018, with long-term incentive (LTI) use reflecting the trend toward more performance shares and fewer stock options. Some other key findings:

• Median LTI values granted to CEOs in 2018 were just over $8.4 million, reflecting a 7.5% median increase over the prior year.

• Shares with vesting tied to performance metrics continue to be the most utilized LTI vehicle among the S&P 500 with prevalence increasing to 92% of the sample in 2018 compared to 84% in 2014.

• Over the same period, the prevalence of shares that vest solely based on service has increased to 62% from 54%, while stock option usage has declined to 58% from 66%. Long-term Incentives a Bigger Part of CEO Paychecks

Source: Mercer, CEO Pay Analysis of S&P 500 Early Proxy Filers

 

Company Success Not a Factor in CEO Pay Ratio

Advocates of the CEO pay ratio disclosure seem to be of the mindset that the ratio correlates with company performance. However, one study finds no such correlation. In fact, the lowest average three-year total shareholder return (TSR) was associated with the lowest pay ratio

band. While the highest average three-year TSR correlated with the band of ratios between 35 and 74, it dropped off as the ratio increased.

Source: Pearl Meyer, “The CEO Pay Ratio: Data and Perspectives from the 2018 Proxy Season”


Other related articles

  • Five Ways to Combat Board Groupthink
    Published May 18, 2022
    By Sharda Cherwoo and Shiva Rajgopal
    Effective boards need contrarians and forward thinkersGroup think is one of the greatest challenges facing corporate boards The tendency among decision makers to go along with the seeming consensus vi ...
  • One Wild Month for Elon Musk, Twitter and Tesla
    Published May 02, 2022
    By Bill Hayes
    Share purchases board seats poison pillsoh mynbspIf the saga of Elon Musks quest for Twitter was a rollercoaster it would rank among Six Flags finestnbspIn less than 30 days time Musk went from buying ...
  • More Gender Diversity Needed on Corporate Boards
    Published April 26, 2022
    By Bill Hayes
    Lack of women is especially apparent at the Csuite levelIn February 2022 Jennifer Reynolds officially became the CEO of Women Corporate Directors an organization touted as the worlds largest membershi ...
  • CEO Pay Records a Major Increase in 2021
    Published April 25, 2022
    By Bill Hayes
    Report finds bonus payouts bolstering CEO financial performancenbspAccording to early proxy filers 2021 was a bounceback year for CEOs with total pay recording an uptick of 19 and bonus payouts up nea ...