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Key Findings from 2015 Innovations in CD&A Design

February 18, 2015

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Key Findings – CD&A Design

1. CD&A Word Count:
CD&A length decreased slightly in 2014 despite steady growth over the previous five years. As companies continue to emphasize disclosure to communicate more effectively with shareholders, CD&A word counts decreased 1.3% from an average of 9,046 words in 2013 to 8,922 words in 2014.

2. Alternative Pay Calculations:
Alternative methods of calculating compensation grew more common in 2012. While realizable pay was only disclosed by a single company in 2011, it was disclosed by four companies in 2012, six companies in 2013, and 19 companies in 2014. Over the same period, organizations referencing realized pay increased from nine companies in 2009 to 34 companies in 2014.

3. Pay for Performance:
“Pay for performance” references increased in the wake of Say on Pay and became an integral component of CD&A design. The number of companies with direct “pay for performance” references in their annual proxies has increased consistently over the last five years, with 84 companies in the S&P 100 including the phrase in their most recent proxies.

4. Shareholder Engagement:
Shareholder engagement disclosure increased, as nearly two-thirds of the S&P 100 (65 companies) included disclosure of outreaches in their most recent proxies, a substantial increase from only seven companies in 2009.