Proxy season has begun in earnest and from here on in it will be hard to keep up. But I wanted to post a quick overview of what we are seeing so far: CEO pay figures are up considerably from last year (and they weren’t low last year). Its early days proxy season wise, but we are already aware of 10 companies where CEO pay increased by 50%. There are another eight CEOs whose pay has increased between 30% and 50%.

This is out of a total of 55 proxy statements we have looked at so far this year. The list we are looking for is by no means a cross section of the S&P 500 companies, but it tilted toward those who award the largest pay packages. I have approximately 200 companies where I try to look at the proxy statements each year. They are companies that have overpaid in the past and often have been on our list for many years, so one would expect some distortion. Still, the amounts this year are striking. In four cases (Schlumberger Ltd, D.R. Horton Inc, Walt Disney Co, & Applied Materials Inc) pay has doubled.

When we see too many bonuses pay at maximum we know the metrics were not set with sufficient rigor. The number of sharp pay increases suggest a systemic issue: the performance being rewarded here isn't that of individual CEOs.

The companies we are aware of that have increased CEO pay of more than 50% and upcoming meetings are:

Schlumberger Ltd                                             April 4, 2022

BorgWarner Inc                                                April 28, 2022

Celanese Corp                                                   April 20, 2022

Goldman Sachs Group Inc                             April 28, 2022

Lennar Corp                                                        April 12, 2022

Jefferies Financial Group Inc                        March 29, 2022

Shareholders have voted against these excessive increases at several meetings that have already taken place. At D.R. Horton’s January meeting an astonishing 72.6% of shareholders voted against pay. At Walgreens Boots Alliance meeting on January 27th, 38.1% of votes were cast against pay.

There are many other companies where pay that has gone up what would appear to be a defensible amount (though whether the pay last year was defensible is another question). There are some with flat pay. We are aware of only three companies where CEO pay has fallen by more than 30%, and two of those -- Philip Morris and HCA Healthcare – appeared on my most recent list of the 100 most overpaid CEOs.

Shareholder votes on pay have the potential to improve not just pay practices but the systemic over-reliance on figures that reward CEOs for an up market or economy. We hope to see more large votes of opposition this year.