How a Small Component in Pay Reveals Insights into Corporate Trends
In a follow-up to our whitepaper, “What ‘Perks’ Can Tell Us About Executive Compensation,” ISS-Corporate reviewed the pay structures for Russell 3000 companies that held annual general meetings in the first nine months of 2024 to analyze the usage and magnitude of perquisites in fiscal 2023. In this update, we continue to focus on perquisites […]
Posted by Subodh Mishra, ISS STOXX, on Monday, January 13, 2025
Editor's Note:
Subodh Mishra is Global Head of Communications at ISS STOXX. This post is based on an ISS-Corporate memorandum by Christian Darmanin, Senior Associate; Samantha Greenwald, Associate; and Kevin Kim, Associate, Compensation & Governance Advisory; at ISS-Corporate.
In a follow-up to our whitepaper, “What ‘Perks’ Can Tell Us About Executive Compensation,” ISS-Corporate reviewed the pay structures for Russell 3000 companies that held annual general meetings in the first nine months of 2024 to analyze the usage and magnitude of perquisites in fiscal 2023. In this update, we continue to focus on perquisites that are most common amongst Russell 3000 companies and have excluded those that are rarely adopted.
KEY TAKEAWAYS
- The number of Russell 3000 companies (excluding the S&P 500) that provide at least one perquisite to their CEO increased by 2.4 percentage points, while the S&P 500 remained steady.
- Overall, the median value of perquisites has increased faster than CEO pay over the past five years.
- While perquisites may not play a major role in investors’ decisions to support Say-on-Pay (MSOP) proposals, companies that provide larger aggregate perquisites tend to have lower MSOP vote support.
- Security perquisites, while relatively rare, are rapidly increasing in prevalence for the S&P 500 and Russell 3000. In 2023, 16.2 percent of S&P 500 and 2.1 percent of Russell 3000 companies provided this perquisite, up from 11.9 percent and 0.8 percent in 2019 for the S&P 500 and Russell 3000, respectively. With increasing concerns regarding the security of CEOs, both the prevalence and value of these benefits are expected to increase moving forward.
