Partner Shaun Bisman was quoted in Agenda discussing CEO Pay and Investor Support. In the article, Shaun discusses how companies that have made “atypical” moves in pay programs (e.g., adjusting payouts, issuing retention awards or changing vesting conditions for unvested awards at a termination) should always disclose strong rationales behind those decisions. Alignment, and communication around that alignment, is very important to shareholders. Shaun also mentions how companies will continue to focus on ESG/diversity but will be “rebranding” these metrics in light of political backlash.

Partner Shaun Bisman was quoted in Agenda’s lead newsletter article discussing Glass Lewis guidelines. In the article, Shaun discusses how Glass Lewis can be relatively opaque in its guidelines compared to ISS, but that Glass Lewis does stress in its latest set of policies that it will be on the lookout for problematic pay practices such as high severance payouts, problematic contractual payments, discretionary bonuses and other practices. Shaun also discussed the update to their (Glass Lewis) change-in-control policies.

Partner Matt Vnuk was quoted in Agenda discussing CAP’s recent Director Pay Research study “Director Compensation: Steady State is Current State”.

Partner Kelly Malafis and Principal Roman Beleuta were quoted in Agenda discussing their study on CFO pay trends. Compensation for CFOs should be strongly monitored in order for boards to attract and retain competitive CFOs. Yet comp committees should also understand that pay is just one piece of the pie. Companies need to ensure that finance executives are getting the exposure and leadership opportunities needed to strengthen the value proposition for the executive and the company. Roman and Kelly’s study found that CFO pay increases (8%) outpaced CEOs (5%) in 2023.

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.