U.S. Executive Pay Advisory Votes

Transcription

1 U.S. Executive Pay Advisory Votes A review of key vote results and trends June 20, Willis Towers Watson. All rights reserved.

2 2016 say-on-pay snapshot 91% No change 2% Average support so far in = 91% Failure rate (28 failed votes) 2015 = 3% (based on 61 failed votes) 11% 28% ISS negative vote recommendations Down from 12% in 2015 Difference in average support between an ISS for and against vote recommendation Down from 31% in % Rate of high ISS concerns related to pay for performance among proposals that ultimately received an against vote recommendation Down from 86% in 2015 Source: Willis Towers Watson Executive Compensation Resources analysis of 1,724 Russell 3000 companies from January 1, 2016 to June 17, 2016 and 2,143 Russell 3000 companies reporting results in ISS recommendations confirmed using ISS s Governance Analytics. 2

3 Perceived pay-for-performance disconnects drive most ISS against recommendations of companies receiving an against recommendation had 21% a high level of ISS concern in more than one category Rate of high concern cited by ISS for recommendations to vote against say-on-pay resolutions Pay for performance Responsiveness Contracts Peer groups Non-performanced-based pay 22% 13% 19% 10% 19% 22% 15% 7% 6% 10% 3% 5% 9% 72% 86% 82% 78% % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Willis Towers Watson s Executive Compensation Resources. ISS areas of concern confirmed using ISS s Governance Analytics 3

4 2016 S&P 1500 equity plan voting results snapshot 89% Average support so far in = 90% 0. Failure rate (One failed vote) 2015 = 0.3% (based on one failed vote) 11% 21% ISS negative vote recommendations Same as 2015 Difference in average support between an ISS for and against vote recommendation Up from 15% in 2015 Source: Willis Towers Watson Executive Compensation Resources analysis of 223 S&P 1500 companies that had a new or materially amended plan with voting results from January 1, 2016 to June 17, 2016 and 336 companies in ISS recommendations confirmed using ISS s Governance Analytics. 4

5 Majority votes against say on pay so far in 2016 ISS issues of concern Company Votes in favor Pay for Non-performancebased performance pay Peer group benchmarking Contracts Responsiveness Repeat Failure* Atlas Air Worldwide Holdings Inc. 49% High Low Medium Low Medium Banc of California, Inc. 29% High Low Low Low Low Bill Barrett Corp. 45% High Low Low Low Low BorgWarner Inc. 40% High Low Medium Medium Low C&J Energy Services, Inc. 10% High Low Low Low High Cepheid 38% High Low Medium Low Low Community Health Systems, Inc. 2 Medium Medium Medium Medium Low Consolidated Tomoka Land Co. 43% High Low Low Low Low Diodes Incorporated 39% High Low Low Low Low Exelon Corporation 38% High Medium Low Low Medium FMC Corp. 46% High Low High Medium Low General Growth Properties Inc 48% High Low Low Medium Low Hatteras Financial Corp 40% Medium Low Low Medium High HCI Group, Inc. 45% High Low Low Medium Medium Masimo Corporation 39% High Medium Low High High MDC Holdings Inc. 40% High Low Low Medium Low Motorcar Parts of America Inc. 47% High Low Low Medium Medium Nabors Industries Ltd 36% High Low Low Medium Low NeuStar, Inc. 46% High Low Medium Low High Nuance Communications, Inc. 33% High Low Low High High Senior Housing Properties Trust 45% Low Low Low Low High Sonus Networks, Inc. 43% High Low Low Low Low Sucampo Pharmaceuticals, Inc. 42% Low Low Low Medium Low Tetra Tech Inc. 40% High Low Low Low Low Tutor Perini Corporation 42% High Medium Low Low Medium Ultra Petroleum Corp. 39% High Low Low Medium Low VeriFone Systems, Inc 45% High Low Low Low Low Wolverine World Wide Inc. 29% High Medium Low Medium Low Percentage of high concerns 86% 0% 7% 21% * Failed say-on-pay prior to 2016 (since 2011) Source: Willis Towers Watson s Executive Compensation Resources. Votes in favor are calculated by dividing the number of for votes by the total number of votes cast (including against and abstaining votes). Companies may report levels of support differently based on how they count abstentions. ISS areas of concern confirmed using ISS s Governance Analytics 5