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Shareholders and Regulators Scrutinize Bank CEO Pay

May 4, 2016

As proxy season comes to a close, shareholder meetings are heating up and Say on Pay votes are rolling in. So far, we haven’t seen too much shake-up from previous years...


Singular Perspective: Incentive Plans with One-Year Performance Periods

May 2, 2016

Executives receive compensation in several forms, typically consisting of a base salary, an annual bonus, and long-term incentives (LTI)—the latter most often in the form of equity. Salaries...


How Much Is Say on Pay Changing Executive Pay Practices?

April 29, 2016

Say on Pay is frequently considered a catalyst for better pay practices at public companies, but in the past five years, shareholders have overwhelmingly passed the measure at companies, and CEO pay...


Energy Sector Decline Influences Incentive Plans in Executive Pay

April 22, 2016

Flailing oil prices have not necessarily indicated a drop in CEO pay across the board for the largest energy, oil and gas companies for 2015—at least not yet. Among the oil and gas companies...


Back to the Future: Companies Lengthen Incentive Plan Performance Periods

April 20, 2016

Setting performance periods is an integral piece of achieving pay for performance alignment in the wake of Dodd-Frank, Say on Pay and mounting shareholder activism. In recent years...


Designing Executive Pay to Drive Shareholder Value

April 18, 2016

Today’s compensation committees—and the members of management who work closely with them—face a formidable task to develop and execute a compensation and benefits program...


Five Ways Companies Structure Executive Stock Ownership

April 15, 2016

Public companies are beholden to align long-term interests of executive officers with those of their shareholders, thus influencing how companies pay for performance...


Stable or Stale? Board Chair Tenure Continues to Rise

April 13, 2016

Shareholder scrutiny of board leadership has ramped up in recent months and will continue to do as annual meetings draw nearer—some recent examples including...


With Voluntary Disclosure, Companies Get Ahead of CEO Pay Ratio

April 11, 2016

In August 2015, the SEC passed the Pay Ratio Disclosure rule as a part of Dodd-Frank, which will require them to include a comparison of CEO pay to that of a median employee...


Probability in Pay for Performance

April 7, 2016

In the age of Say on Pay, “pay for performance” has morphed from catch phrase into standard practice. According to Equilar’s 2015 Equity Trends Report, just over half of S&P 1500 companies granted...


Equity Experts: How to Manage the Push for TSR in Executive Pay Plans

April 5, 2016

The National Association of Stock Plan Professionals (NASPP) hosts a regular podcast aptly entitled “Equity Experts,” and featured Equilar’s director of research, Belen Gomez, in a recent episode...


CEO Performance Award Payouts Are Increasingly Off Target

April 1, 2016

In its most elemental form, executive pay consists of “fixed” elements—base salary and time-vesting equity–and “variable” or “at risk” elements—annual incentive and long-term incentive plan...


Super-Board Shuffle: Avon May Lose Position as Board Diversity Leader

March 31, 2016

Over the past several months, Avon Products has run a gauntlet of buyers and activists. While the company has avoided a proxy fight, some directors may become collateral damage after its impending board refreshment...


Shareholder Engagement: Increasing Exposure in Proxy Disclosure

March 30, 2016

Shareholder engagement has become one of the most talked-about issues in corporate governance, and with good reason. In the past few years, public companies have been held up to greater scrutiny due to many factors...


Are Longer Proxy Statements Deterring Shareholder Engagement?

March 28, 2016

In light of the financial crisis, Dodd-Frank and Say on Pay, executive compensation has become a hot-button issue in corporate governance. Continuous interplay between public companies and their shareholders—and the...


Will the SEC Rule on a Gender Pay Ratio?

March 24, 2016

Though gender pay equality is far from a recent issue, several scenarios during the past several weeks have brought the gender pay gap to the forefront of executive compensation and corporate governance...


Proxy Season Prompts Big Changes on High-Profile Boards

March 23, 2016

Board succession and refreshment have become consistent topics of conversation in corporate governance, with shareholders directly sending a message to companies that they expect regular...


Companies Just Say No to “Pay for Pulse”

March 21, 2016

In the wake of Dodd-Frank, Say on Pay, and calls from proxy advisors and shareholders for stronger links between pay and performance, public companies have taken a closer look at the design...


Transportation Companies and Executive Travel Perks

March 17, 2016

Country club memberships, annual physicals and free financial advice don’t always spring to mind when pondering executive pay. Traditionally, perks like these hid behind salaries, bonuses...


“First of Its Kind” Shareholder Proposal Takes on Tax Inversions

March 15, 2016

In the past five years, shareholder proposals have continued to increase, reflecting greater scrutiny on corporate governance. In 2015, there was an activist campaign launched...


Independent Women: Female Directors Drive Growth of Outsider Boards

March 14, 2016

In today’s corporate world, boardroom diversity is top of mind for governance professionals and investors alike. Shareholder engagement and activism has pressured companies...


Potential Proxy Fight at United Continental Spotlights Activist Demands for Board Skills

March 11, 2016

Shareholder activism has pushed board assessment and refreshment to the forefront in the 2016 proxy season. With proxy access becoming a hot-button issue, more and more...


New Diversity Fund Shines Light on Corporate Leadership Gender Equality

March 8, 2016

On Tuesday, March 8, State Street Global Advisors (SSGA) began trading “SHE,” an exchange-traded fund centered on companies that have gender diversity at the highest ranks...


Incentivizing Risk: Cash Severance Multiples among U.S. REITs

March 8, 2016

In addition to attracting talent and providing retention value, severance packages can incentivize executive risk-taking by providing a safety net in case certain decisions don’t turn out as planned...


Fewer Classified Boards Could Mean Higher Director Turnover

March 7, 2016

Directors are increasingly on the hot seat as board refreshment becomes a focus of shareholders and proxy access continues to gain traction. Indeed, 2,729 new directors joined Russell 3000 boards in 2014...


Combine and Cash In: Executive Awards for Inversions and Mergers

March 4, 2016

2015 saw heightened M&A activity as all industries participated in a whirlwind of corporate transactions. At the forefront of this consolidation flurry, corporate inversion situations and mergers of equals gained significant...


Sell-Off: Fortune 100 CEOs Rarely Hold Exercised Options

March 2, 2016

Stock options can be a sticky issue in executive compensation, and as a result, their popularity as a means to pay corporate executives has waned over the last few years. Debates over the utility of options as an equity vehicle center...


Best Practices for 10b5-1 Plans and Insider Trading Policies

February 29, 2016

10b5-1 plans continue to receive substantial attention from the media, legal commentators, academics, regulators, investors and shareholder organizations. While October 2015 marked the 15th anniversary of the creation of rule 10b5-1...


Are Boards Getting Boring? 10% Have At Least Four Directors Over 70

February 26, 2016

The recent resignation and retirement of Sumner Redstone at CBS and Viacom in a two-day period brought to light shareholder concerns around board age and tenure. As a growing number of directors nears mandatory retirement age...


Pay Display: How Companies Visualize Pay for Performance

February 24, 2016

Pay for performance is at the forefront of executive compensation program design, and stakeholders are adamant in ensuring executive pay levels are commensurate with a company's performance and returns to shareholders. In 2015...


Bull Market: Big Banks Show CEO Pay Increases

February 23, 2016

Early indications from the largest U.S. banks could signal an overall increase in CEO pay for the financial sector in fiscal year 2015, as recent filings revealed 20%-plus pay raises for Bank of America's Brian Moynihan and Citigroup's...


Keeping the Lights On: Maintaining Line of Sight in Energy Sector Incentive Plans

February 22, 2016

Incentive plans are designed to reward executives for achieving meaningful but realistic targets. In a volatile or down market, even the best performing companies are subject to industry or economy wide factors, and selecting metrics...


Shareholders Suspect Poor Governance from Stagnant Boards

February 19, 2016

Many boards address succession only on an as-needed basis when facing an impending vacancy, which can lead to challenges in a variety of scenarios. Shareholders are taking more notice of how the directors represent their interests...


Healthy Exercise: Trading Trends of Fortune 100 Executives

February 17, 2016

Elon Musk recently made headlines when he exercised nearly $100 million worth of stock options on January 27, 2016, ahead of Tesla’s earnings announcement. Tesla’s stock price had fallen roughly 25% in 2016 to that point...


Investors to Boards: Be Better Prepared for Shareholder Meetings

February 12, 2016

Shareholder engagement is on the rise and will only continue as investors seek to better understand a company’s practices and policies. As a result, more companies are taking a proactive approach to communicate how their governance...


Split Decisions: CEO/Chair Positions Decline in Response to Shareholder Concerns

February 10, 2016

Traditionally, corporations combined the roles of chief executive officer and board chair, appointing the position to a single leader, but in recent years, shareholders have raised concerns about the combination of these two primary ...


The Role of TSR Modifiers in Long-Term Incentive Plans

February 8, 2016

As a result of increased scrutiny on pay for performance by investors and regulators, more companies have incorporated total shareholder return (TSR) in their incentive plans. Equilar's latest Equity Trends Report shows that almost 50% of...


Institutional Investors on Long-Termism: Subtle Aim at Activists?

February 5, 2016

On February 1, reports surfaced that Laurence Fink, the CEO of BlackRock, had sent a letter to more than 500 companies asking them to focus less on short-term outlooks and estimates and more on long-term strategic approaches as they...


Redstone Retires: Reflections on Board Succession and Shareholder Engagement

February 4, 2016

The rise in shareholder engagement and activist attention to board composition has put companies are under pressure to evaluate their boards on an ongoing basis. Boards that are unprepared to manage a transition may find themselves in...


Boards by the Numbers: New Directors in the Russell 3000

February 3, 2016

The election of new board members is typically a foremost topic of discussion during annual shareholder meetings. This year, with proxy access on the rise, activist and institutional shareholders alike have been focused on consistent...


Staying Ahead of the Curve: Incentive Payouts That Achieve Pay for Performance

February 1, 2016

Since Dodd-Frank and Say-on-Pay were implemented more than five years ago, companies, proxy advisors and shareholders have focused on pay for performance as a measure of effective executive compensation programs. The logic suggests that if...


Board Skills Matrices: Insightful or Redundant?

January 28, 2016

In late 2009, the SEC passed a rule requiring companies to disclose experience, qualifications, attributes or skills for each director on the board or up for nomination, and this information has become highly valued among shareholders...


Are Companies Prepared for Succession Planning?

January 27, 2016

Successful board and CEO succession planning is an integral factor in maintaining long-term stability of companies. Without a strong plan in place, organizations put themselves at risk on many counts. Equilar recently hosted a webinar...


Pay Versus Performance: Are You Prepared?

January 26, 2016

As the calendar barrels into 2016 and proxy season is in our immediate sights, anticipation gathers for how companies will address proposals put forth by the SEC in this year's filings. In particular, the SEC's proposed...


How Companies Handle Hot-Button Proxy Issues

January 21, 2016

Dodd-Frank continues to shape the way companies engage with their shareholders, particularly with matters dealing with executive compensation such as Say-on-Pay and Pay for Performance. Equilar recently hosted a webinar featuring...


On Guard, Part 3: Oversight of Cybersecurity by Industry

January 18, 2016

Cybersecurity strategy will be a crucial corporate risk and governance issue for 2016 and beyond. Customers care about their private data, enterprises value their intellectual property and investors seek assurance that their portfolio...


Shareholder Activism and Director Approval Ratings

January 14, 2016

It’s no secret that shareholder activism is on the rise at U.S. companies, surfacing in many different ways. Shareholders have voting power on a wide range of corporate governance decisions, particularly on the right to choose...


Gender Parity in the Boardroom Still Decades Away

January 11, 2016

The number of women on boards continues to rise, but it will be a long time before female representation at the largest U.S. companies matches their representation in the workforce, according to a new report from the Government Accountability...


Board De-Classification May Lead to More Diversity

January 8, 2016

Board diversity issues have come to the forefront in recent years, and shareholders are pushing companies across the S&P 500 to elect new and diverse candidates to join their boardrooms. Progress has been steady, but many critics...


CEO Tenure Has Increased Nearly One Full Year Since 2005

January 6, 2016

Contrary to trends that may influence executive turnover such as increased M&A activity, scrutiny from activist investors to perform in the short term and an aging boomer population, tenure for S&P 500 CEOs has increased nearly...


Will 2016 Be the Year of Proxy Access?

January 4, 2016

As detailed in Equilar’s latest report, shareholder engagement is on the rise in various forms, and company outreach to ensure investors have appropriate access to exercise their rights is a dominant topic in corporate governance...


New Challenges Inspire Changes to Board Committee Structures

December 17, 2015

As public concerns and needs change, so do board structures. Boards establish and dissolve committees based on their needs to deal with a specific matter or general issue to help the board for diligent decision-making. In the past...


Year-End M&A Flurry Shines a Light on Golden Parachutes

December 16, 2015

As 2015 comes to a close, several major M&A announcements, proposals and rumors are making headlines. In many of these cases, the often-large sums of money outgoing CEOs and other executives stand to receive as severance—also known...


On Guard, Part 2: Board Committee Oversight of Cybersecurity

December 14, 2015

Potentially valuable data underpins the next wave of innovative products, spanning a spectrum from customer credit card and social security numbers to corporate intellectual property. While data breaches at prominent retailers, healthcare...


DowDuPont: A Merger of Activism

December 11, 2015

Dow and DuPont, two of the largest U.S. chemicals companies with a combined $130 billion market cap, agreed to a merger of equals on the morning of December 11. If the deal is approved, they subsequently plan to split into three companies...


Communicating Board Diversity through Disclosure

December 10, 2015

In the past few years, shareholders and boards have given considerable attention to boardroom diversity that reflects a wider variety of opinions, skills and experience to meet the challenges and opportunities in the changing corporate landscape...


Yahoo! Mayer’s Potential Severance Package Draws Significant Attention

December 9, 2015

With investor engagement continuing around what exactly to do with Yahoo, media outlets have turned their attention to Marissa Mayer’s potentially large change-in-control payout in the case that the company were sold and she were terminated. According...


Going Overboard? Restrictions May Shrink Qualified Director Pool

November 20, 2015

With shareholder engagement and outreach coming to the forefront in the wake of Dodd-Frank, directors’ responsibilities are continually expanding into significant professional obligations. As a result, many shareholders and other governance stakeholders...


On Guard, Part 1: Cybersecurity in S&P 500 Boardrooms

October 16, 2015

High profile data breaches grab headlines and deservedly so—exposure of private, proprietary information puts businesses, investors, and consumers at risk. Corporate and large organizational data breaches are increasing in both frequency and magnitude...


@Jack Is Back: Twitter’s New CEO Finds Himself in Rare Company

October 7, 2015

After months of speculation, Twitter named its new CEO this week—the company’s co-founder (and former CEO) Jack Dorsey. Following several quarters of slowing user growth, pressure on Twitter from its investors and from Wall Street in general reached...


The Changing Face of Fortune 1000 Boardrooms, in Five Charts

October 6, 2015

We’re in an unprecedented era in shareholder engagement, and as a result, the make-up of U.S. boardrooms is changing to reflect this new reality. Rules and regulations following Dodd-Frank have heightened the availability of information and awareness...


Chairman/CEO Votes: Signs of Shareholder Trust or Playing It Safe?

September 23, 2015

On September 22, Bank of America shareholders voted whether CEO Brian Moynihan would continue in his role as Chairman of the Board. In the weeks leading up to the shareholder meeting, many wondered if a vote to split the roles and implement...


Eradicating Cyber-risk: CEO Expertise and Experience

September 15, 2015

As companies rely more heavily on compiling, storing, utilizing, and disseminating large amounts of proprietary and private data, securing such information continues to pique the interest of invested parties. Customers, consumers and vendors...


Change-in-Control: Pay Trends in Transition

September 3, 2015

Although corporate change-in-control (CIC) situations happen infrequently, stakeholders place the details of such transactions under a microscope, scrutinizing them from every angle. In particular, proxy advisory firms and shareholders view...


Weighing in on Performance Metrics

August 27, 2015

When it comes to doling out long-term incentive plans, shareholders and companies both hold vested interests in how awards are structured. Not only do equity awards contribute to the retention of executives, but they also set the tone for...


Director Compensation Under Scrutiny: Are Pay Increases Justified?

August 20, 2015

Median director pay among S&P 500 companies has increased significantly in recent years. According to the latest Equilar research, director retainers reached a median $235,000 in 2014, up from $215,000 two years prior. In response, shareholders...


SEC Shines a Spotlight on CEO-Employee Pay Ratio

August 5, 2015

Dodd-Frank initially mandated that U.S. public companies disclose the ratio of median pay between their CEOs and their employees, and thus the subject has been a source of much discussion since its passing. But five years later, exactly how...


Does It Really Pay for CEOs to Perform? A Comparative Analysis

August 4, 2015

CEO pay continues to rise, reaching a median $10.3 million among S&P 500 companies in 2014, according to Equilar’s latest research. But alongside consistent growth, CEO compensation has also experienced increased scrutiny since the passing of Dodd-Frank...


Dodd-Frank’s Fifth Anniversary: In Retrospect and Prospect

July 27, 2015

The Dodd-Frank Wall Street Reform and Consumer Protection Act – better known colloquially as “Dodd-Frank” – celebrated its fifth anniversary on July 21, 2015. Though the sweeping financial markets reform initiated by this legislation has yet to...


Equity Compensation Plans: Breaking down Dilution

July 24, 2015

A well-designed equity compensation or performance incentive plan has potential to be a “win-win” for those with skin in the game, and corporate issuers have the opportunity to align their stakeholders’ interests by including equity pay in executive...


Enforcing Accurate Financial Reporting — Clawbacks

July 6, 2015

The Securities and Exchange Commission (SEC) recently proposed a set of rules that would govern the clawback provisions of listed companies. These standards would apply specifically to compensation that is linked to accounting-related metrics, stock price...


Pay Versus Performance Rule Faces Potential Issues

June 18, 2015

As noted in a previous post, the Securities and Exchange Commission (SEC) recently released language concerning the Pay Versus Performance disclosure required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Public comment on the...


CFO Pay Increases: Falling Behind the CEO?

June 10, 2015

In a recent post, we looked at changes in CEO pay in the S&P 1500 and how that compares to the average worker. While the CEO is typically a company’s highest paid and most high-profile employee, they are but one member of the executive team. Using...


Peer Group Construction and Analysis Update

June 4, 2015

A key part of Equilar Insight’s Pay for Performance Analytics, Equilar Market Peers provides a unique and powerful methodology for creating peer groups. Establishing a peer group is a vital step in a company’s pay and performance benchmarking practices. Other...


Anticipating the CEO Pay Ratio – CEO Pay vs Median Income

May 20, 2015

The difference in pay between CEOs and the average worker became a hot-button issue in the years following the financial crisis of 2008. The Dodd-Frank Wall Street Reform and Consumer Protection Act mandates that companies disclose the pay ratio between the CEO...


CEO Pay Rising for Both Genders

May 19, 2015

On May 16, 2015, Equilar announced the publication of the Equilar 200 CEO Pay Study in The New York Times. This list contains the 200 highest-paid chief executive officers among public U.S. companies valued at $1 billion or more in market...


Shopify IPO Emerges With New Details

May 11, 2015

Shopify, an e-commerce software company based in Ottawa, Ontario, revealed last Wednesday in a new SEC filing that it is aiming to raise upwards of $107.8 million through its IPO with shares pricing between $12 and $14 each. Upon the offering, Co-Founder, Chairman of...


Why Do Some Companies Defend a Failed Say on Pay Vote?

May 7, 2015

The years since the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act have seen increasing attempts to link executive pay with performance. One requirement of the bill is that companies hold regular shareholder votes on executive compensation packages...


SEC Proposes Pay For Performance Rule

April 29, 2015

On April 29, 2015, the SEC released a proposal to enact Section 953 of the Dodd-Frank Act. Section 953 deals with the relationship between compensation and company performance. This is the second executive compensation rule proposed this year by the SEC, following the...


Zero Base Salary Earned by American Airlines CEO

April 24, 2015

It’s common practice for most firms to make a certain percentage of executive compensation “at risk.” This can be in the form of variable cash payouts as well as equity awards, which intrinsically align the officer in questions’ goals with those of and the company...


Equilar 100 Study Key Findings, as seen in The New York Times

April 17, 2015

On Friday, April 10th, the New York Times published its coverage of the Equilar 100 CEO Pay Study, an analysis of CEO pay at the 100 largest public U.S. companies as measured by revenue. Over the past nine years, Equilar has collaborated with The New York Times...


CEO Median Pay Ratio: Standard Deviation in Standards

April 8, 2015

One of the measures proposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) is mandatory disclosure of the ratio between the CEO’s compensation and the compensation of the average worker. Though this rule has not yet been....


Google CFO Hire Makes a Big Splash in Executive Compensation

April 2, 2015

Executive compensation has made the news recently with Google offering a $70 million pay package to incoming CFO Ruth Porat. Beyond the eye-catching headline, several interesting kernels are buried inside the deal. Google...


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