Partner Lauren Peek and Principal Joanna Czyzewski were quoted in an Agenda article discussing negative discretion and CEO pay. The article discusses Lauren and Jo’s Early Filers study (i.e., companies with fiscal years between Aug and Oct 2023) which that revealed several instances where companies exercised negative discretion on CEO bonuses. Boards are advised not to use discretion on a regular basis, but if they have a list of “usual unusual” items that can trigger the use discretion on payouts, it can help clarify when it may/may not be appropriate.

Partner Lauren Peek and Principal Joanna Czyzewski’s recent research on “Early Filers” (i.e., CEO pay levels among 50 companies with fiscal years ending between August and October 2023) was referenced in an Agenda article.

Partner Melissa Burek and Principal Michael Bonner were quoted in Agenda discussing incentive metric trends. In the article, Melissa and Michel discuss how large companies are increasingly using nonfinancial or strategic metrics in their executives’ annual incentive plans, as well as using more metrics than they did in the recent past. Although there isn’t a major difference in annual incentive payout patterns between companies that do and don’t use nonfinancial metrics, comp committees still need to be extra careful that the use of nonfinancial metrics doesn’t lead to payouts that are misaligned with the company’s overall performance.

Principal Joanna Czyzewski was quoted in Agenda discussing S&P 500 CEO pay ratios. In the article, Joanna discusses how the gap between CEO and median employee pay has increased since 2018, and so has shareholder scrutiny of human capital oversight.

Principal Shaun Bisman was quoted in Agenda discussing the Say on Pay voting outlook for 2024. Compared to recent years, support for executive pay programs is expected to rise for 2024 proposals, as compensation plans received improved support in 2023. During the pandemic, some public company boards used special retention awards and other measures to increase incentive payouts, which resulted in criticisms from institutional investors and proxy advisory firms (resulting is lower support for executive pay programs). Early 2024 voting shows that say-on-pay support is close to returning to pre-pandemic levels.

Principal Shaun Bisman was quoted in Agenda discussing Say on Pay changes to Form N-PX. Significant changes to a regulatory filing required from institutional investors will allow boards more insight into their shareholders’ voting patterns (regarding compensation). These disclosures are likely lead to a more beneficial shareholder outreach process. Under changes to Form N-PX finalized by the SEC in 2022, institutional investors will need to disclose their say on pay vote (as well as other compensation-related votes). The 2024 proxy season will be the first subjected to this new level of transparency as the rule became effective for votes cast after June 30, 2023 (most votes take place in the first half of the year).

CAP Principal Ryan Colucci was quoted in Agenda discussing the Board research he performed. One of the findings highlighted in the article discusses how Board leaders are less likely to serve on the audit committee because of the specialized expertise required of the role. Audit committees require chairs with more hard skills and experience with financial statements, as opposed to nom-gov and compensation committees that rely on softer, less mechanical skills.

Upcoming Events See All

Jun 25, 2024

2024 Proxy Season Review

New York, NY

A comprehensive review of the 2024 proxy season, exploring emerging trends, notable shareholder proposals, and regulatory developments. With a focus on corporate governance, executive…
  • Shaun Bisman
  • Chris Callegari

Jul 16, 2024

What Private Companies Need to Know to Design Effective Incentive Plans

Boston, MA

In this session, we cover the strategies effective private companies employ to ensure incentive plans support the company’s strategic objectives and culture, are competitive…
  • Shaun Bisman
  • Susan Schroeder