A CAP report detailing CEO pay levels among 50 companies with fiscal years ending between August and October 2022 was recently referenced to by Directors & Boards. The report revealed that median CEO total direct compensation was up 4% when compared to the same period in 2021. The report also revealed that overall fiscal year 2022 financial performance was up by approximately 10% while total shareholder return was down by 16%. This report was authored by Partner Lauren Peek and Principal Joanna Czyzewski. Read the full report here.
Recently, Partner Matt Vnuk led a Q&A at MLR Media’s Character of the Corporation Conference discussing the topic of executive compensation. Directors & Boards published an excerpt from the panel in their newsletter discussing bonus programs and metric prevalence and review. Members of the panel included Beth Albright, Compensation Committee member and Audit Committee member at Darling Ingredients and Dawn Zier, Compensation Committee Chair at Prestige Consumer Healthcare.
Following the published CAP report analyzing early filers compensation data, author Ryan Colucci was recently interviewed by Directors & Boards and took a deeper dive into the findings. Colucci shared that CEOs and CFOs most often receive salary increases when warranted from a competitive market perspective. Recent findings show approximately 80% of each group received an increase however, the magnitude of these increases was slightly higher for CFOs than CEOs, on average. Read the full Q&A here.
Partners Dan Laddin and Eric Hosken’s article on 2023 Compensation Committee priorities was published by Directors & Boards this week. The article explains their predictions in light of the impending high degree of economic uncertainty. Some priorities listed include pressure-testing incentive plan goals, ensuring appropriate equity incentives, addressing new regulatory requirements, and navigating a challenging shareholder environment.
Partner Eric Hosken recently participated in a Q&A with Directors & Boards. In this interview, Eric answered several questions regarding the new clawback rules that the SEC approved in October 2022. The SEC initially proposed these rules back in 2015. You can find additional information about the new policies here.
The early filers report, which was published by Principals Lauren Peek and Joanna Czyzewski, was cited by Directors & Boards in their article about soaring CEO pay. CAP found that CEO compensation in 2021 was able to “bounce back” after it was affected in 2020 due to the pandemic. This increase was primarily driven by a 75% increase in bonus payouts from 2020. This is the fourth time this report has been cited by a business publication.
Partners Dan Laddin and Eric Hosken recently authored an article detailing top compensation committee priorities for this upcoming year that was published by Directors & Boards. Laddin and Hosken explain how the market for talent was at an all-time high level of movement and turnover; the talent war and the ‘great resignation’ will be major players for management teams this year. In addition, they also discussed the fourth quarter of 2021 and how inflation was running at an annualized rate of more then 6%, a level that has not been seen in decades. Purchasing power of employees will be diminished and many companies have found themselves raising their annual salary increase budgets to 4% or more for 2022. A last highlight continues the conversation of ESG. This will be a continued area of focus from last year and they expect compensation committees to continue the use and implementation of ESG metrics in their incentive plan designs as way to complement and communicate their business strategy.