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Equilar: Only 3.3% of S&P 500 Companies Disclose CEO Succession Plans

REDWOOD CITY, CA (December 13, 2016)—The number of CEOs leaving their posts has risen at a consistent clip over the past few years, but companies are generally vague about how they plan for a CEO transition, according to Executive Compensation & Governance Outlook 2017, a new report written by Equilar with context provided by Hogan Lovells and Labrador. While more than one-third of S&P 500 companies disclosed that they have a CEO succession plan in their proxy statements, just 3.3% included extensive details of what that plan includes.

“Shareholders have a deep interest in how their portfolio companies prepare to handle major events like a CEO transition,” said Belen Gomez, Director of Research and Board Intelligence Services at Equilar. “However, they must also understand that strategic, competitive and talent retention issues may take precedent over full transparency. There needs to be sufficient information to ease shareholder anxiety around the issue—that they have a thoughtful plan in place—without compromising the strategic position of the company.”

The report analyzes trends in disclosure practices at S&P 500 companies focused on three major categories: Compensation, Shareholder Engagement, and Board Governance and Succession Planning. Contributed commentary includes best practices for how companies could approach these governance issues internally and communicate to stakeholders through proxy statements and other channels.

In the last five years, the number of S&P 500 CEO retirements, resignations or terminations has increased incrementally year over year, to the point where there has been more than 10% turnover at the CEO position every year across the index. As of October 31, 2016, there had been 59 CEOs who had either left their positions or announced that they would before the year’s end, up from 56 in all of 2015 and from 48 in 2012—nearly a 25% increase in a five-year timeframe.

“Succession planning is a critical area of focus, as bumpy CEO transitions can undermine investor confidence and erode shareholder value,” said Amy Bowerman Freed, a Securities partner with Hogan Lovells. “Shareholders are increasingly holding boards accountable for developing succession plans for executives and boards.”

Though there is no requirement to disclose information about succession planning, scrutiny from shareholders and proxy advisors in recent years has turned up the heat on boards to clarify their strategy and risk oversight in public filings. More generally, they have responded—the Equilar report found that the number of S&P 500 companies disclosing shareholder engagement programs in their proxy statements increased from 20.1% in 2012 to 66.1% in 2016. Clearly, these companies are committed to being more transparent about communications with shareholders, but the question remains whether their method of engagement provides information that shareholders want—and need—to hear.

“Companies will increasingly use the proxy statement as an opportunity to communicate short- and long-term goals, and are likely to consider disclosing information that is not required,” added Molly Doran, Director, Advisory Services for Labrador. “Any company can say they ‘engage’ with their shareholders, but providing proof is what ultimately makes a difference. It is important to remember that credit can’t be given if the information isn’t there.”

About the Report

Executive Compensation & Governance Outlook 2017 features data and identifies trends in disclosure practices at S&P 500 companies focused in three major sections: Compensation, Shareholder Engagement, and Board Governance and Succession Planning. Data includes the percentage of companies that disclose information on pay for performance, clawbacks, shareholder engagement, board diversity and CEO succession plans, as well as data on Say on Pay and other shareholder voting trends, and much more. The report also highlights cutting-edge disclosure examples from companies that clearly display this information in interesting or innovative ways.

About Equilar

Equilar is the leading provider of board intelligence solutions. Companies of all sizes rely on Equilar for their most important boardroom decisions, including 70% of the Fortune 500 and institutional investors representing over trillion in assets. Equilar offers data-driven solutions for board recruiting, executive compensation and shareholder engagement that bring together business leaders, institutional investors and advisors to drive exceptional results while ensuring sound corporate governance. The Equilar suite of solutions includes industry-leading board education symposiums, comprehensive custom research services and award-winning thought leadership. Founded in 2000, Equilar is cited regularly by Associated Press, Bloomberg, CNBC, The New York Times, The Wall Street Journal and other leading media outlets. Learn more at

About Hogan Lovells

Straight talking. Thinking around corners. Understanding and solving the problem before it becomes a problem. Performing as a team, no matter where we’re sitting. Delivering clear and practical advice that gets your job done. Our 2,500 lawyers work together with you to solve the toughest legal issues in major industries and commercial centers around the world. Whether you’re expanding into new markets, considering capital from new sources, or dealing with increasingly complex regulation or disputes, we help you stay on top of your risks and opportunities. Learn more at

About Labrador

After six years in the US and two decades in Europe, Labrador’s mission remains the same: to publish reader-centric documents that generate trust with shareholders and, in turn, create value for our clients. Focusing exclusively on corporate disclosure documents, we have developed a unique understanding of industry trends and best practices. Labrador offers a single-source solution for advisory, Plain English editorial, design, production, SEC filing, print management and digital solutions.

Thanks to our on-going dialogue with advisors, investors and other stakeholders we keep up with their evolving expectations as well as benchmark trends. We closely monitor developments in SEC regulation as disclosure requirements continue to expand and help you implement best practices to keep you ahead of the curve.


Amit Batish
Director of Content & Marketing Communications
Equilar, Inc.

Robert Snoddy
Hogan Lovells
+1 202 637 6826

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