Partners Dan Laddin and Matt Vnuk were quoted in Agenda’s recent article discussing Director Pay research. Dan and Matt discuss the growing demands of Board leadership roles and the potential increase of retainers. They mention that lead director pay has moved a little more aggressively than board chairs but some boards are reluctant to address below-market pay for individual roles as it could cause the company to stand out for the wrong reasons. Generally, directors need to know the increase is reasonable from a market perspective.
Partner Matt Vnuk and Associate Kyle White were quoted in Agenda’s recent article discussing Tesla’s recent board compensation settlement. Tesla’s board of directors recently agreed to turn over $735 million and make their non-employee director compensation contingent on an annual vote from unaffiliated shareholders. The concessions are part of a proposed settlement to end claims that directors “grossly” overpaid themselves. They mention that as a best practice, directors should strive to compensate themselves in line with other similarly sized companies, which is likely to result in less “push back”. Directors do not want their compensation to be a distraction to the organization.
Principal Shaun Bisman was quoted as in Agenda’s recent article discussing the Supreme Court’s recent decision to strike down race-based college admissions at Harvard. Shaun mentions that companies need to determine if they are willing to support these goals in compensation, if they can adequately measure progress, and to what degree do they want to communicate and hold executives responsible for progress.
Partner Kelly Malafis and Principal Shaun Bisman were quoted in Agenda’s recent article discussing discretionary bonuses amid performance woes. Bisman sheds light on the discussions about the potential recession that have been ongoing for the past 12 to 18 months. He believes it’s too early to tell if there is going to be a recession or not, but compensation committees need to focus on business as usual and focus on shareholder alignment. Malafis shares that the July or August meeting is often the time for committees to hold discussions about performance measures and incentive plan design for the following year.
Partner Lauren Peek was recently quoted by Agenda in their recent article about the drop in bonus payouts. Peek shares that although the dip in bonuses wasn’t unexpected given last year’s market performance, 2022 was unique in that shareholder return and company performance did not align. Peek also explained how it is important for compensation committees to make sure that executives are receiving a value that is in line with what the intentions were as long as it aligns with performance.
A CAP report on 2022 Say on Pay authored by Principal Ryan Colucci and Associates Theo Allen and Kyle White was recently referenced to by Agenda. The report shared that Amazon’s 2022 say-on-pay vote support of only 55% was considered low, since the average say-on-pay result for S&P 500 companies was 87.2% in favor last year. Read the full CAP report here.
Partner Kelly Malafis was recently quoted in an Agenda article regarding the new SEC pay-versus-performance (PvP) disclosures. Malafis shares that proxy advisory firm ISS might include questions to investors in its annual policy survey this summer to get their views on PvP disclosures. To date, proxy advisory firms have been reviewing the information and publishing it in reports to investors but aren’t using it to inform their voting recommendations.