CEO pay: Shareholders care more than ever

Every year, As You Sow – the leading US non-profit shareholder advocate – identifies the 100 most overpaid CEOs of the S&P 500 and analyses whether or not pension funds and financial managers have held companies accountable for excessive compensation.

In February 2019, As You Sow issued its fifth annual report, The 100 Most Overpaid CEOs: Are Money Managers Asleep at the Wheel?, created in order to bring the problem of excessive CEO pay into focus.

Under provision 951 of the 2010 Dodd-Frank financial reform act, shareholders of US companies were given the right for the first time to vote on compensation as presented in the company’s annual proxy statement for the five named executive officers (NEOs).  The provision grew out of decades of shareholder activism at hundreds of companies, with shareholders demanding disclosure on CEO pay. In the years leading up to the act, shareholder proposals that called for such a vote began receiving majority support. Several companies agreed to voluntarily adopt what some called a say-on-pay policy. Shareholder votes began in 2011 and the first votes covered by our report were from 2013, when how funds were exercising this fiduciary duty was still unclear. Read Full Article - Ethical Boardroom, August 14, 2019