How Should Compensation Committees View 2024 Say on Pay Results?
On the surface, there is no standalone trend in this year’s Say on Pay voting that would create an interesting headline for compensation committees. The Russell 3000 failure rate thus far in 2024 is below 1%, marking the lowest since the 2017 voting season. Additionally, average Say on Pay support among Russell 3000 and S&P […]
Blair Jones is a Managing Director, Austin Vanbastelaer is a Principal, and Justin Beck is a Senior Consultant at Semler Brossy LLC. This post is based on their Semler Brossy memorandum.
On the surface, there is no standalone trend in this year’s Say on Pay voting that would create an interesting headline for compensation committees. The Russell 3000 failure rate thus far in 2024 is below 1%, marking the lowest since the 2017 voting season. Additionally, average Say on Pay support among Russell 3000 and S&P 500 companies has reached its highest level since 2017.
One could look at these results and walk away confident that Say on Pay has been “figured out.” Neither ISS nor Glass Lewis made sweeping changes to their proxy voting guidelines for 2024, and most investor pay-and-performance assessment frameworks remained largely the same year-over-year. However, this takeaway ignores the dynamic nature of shareholder voting, which is subject to continuous influence from proxy advisors, investors, activists, the media, and countless other forces.
The most compelling trends of this proxy season emerge from a deeper analysis of companies that received less than 75% support in addition to those that failed. Insights from this group reveal where investors, proxy advisors, and other stakeholders may have heightened expectations in the future.
