Issues: CEO and Executive Compensation Practices

Perhaps the key governance issue today is executive compensation. Driven by the Dodd-Frank say-on-pay mandate, compensation has never been under more scrutiny. As investors look for better aligned compensation and compensation committees try to understand say-on-pays votes, The Conference Board Governance Center, in collaboration with other practices of The Conference Board, is exploring these issues in depth. 

Related Research and Writings

CEO and Executive Compensation Practices: 2018 Edition
October 2018 | Research Report
This report documents trends in senior management compensation. It benchmarks individual elements of compensation packages and the features of short term and long-term incentive plans (STIs and LTIs), provides details on shareholder advisory votes on executive compensation (say-on-pay), and outlines practices on board oversight of compensation design. 

CEO and Executive Compensation Practices: 2017 Edition

August 2017 | Research Report
This report benchmarks individual elements of compensation packages and the evolving features of short- and long-term incentive plans, details shareholder advisory votes on executive compensation (say on pay), and outlines the major practices on board oversight of compensation design. 

CEO and Executive Compensation Practices: 2015 Edition
August 2015 | Research Report
Published by The Conference Board in collaboration with Arthur J. Gallagher & Co., CEO and Executive Compensation Practices: 2015 Edition documents trends and developments on senior management compensation at companies issuing equity securities registered with the US Securities and Exchange Commission (SEC) and, as of May 2015, included in the Russell 3000 Index. 

Getting Off The Wrong Executive Compensation Road
January 2015 | The Governance Center Blog
When you are traveling down the wrong road, changing lanes doesn’t help very much. Yet that’s what we’ve been doing about executive compensation for years, as we tinker with stock options or restricted stock or add performance hurdles. Sometimes, it’s necessary to stop, remember the destination, and recalibrate your route.

US Top Executive Compensation Report: 2014 Edition
October 2014 | Research Report
This report examines salary, total cash compensation, total compensation, and the mix of compensation elements for the CEO and the five highest paid executives of 2,283 US-listed companies by specific revenue and industry groups.

Supplemental Pay Disclosure: Overview of Issues, Proposed Definitions, and a Conceptual Framework
Septmber, 2013 | White Paper
This white paper lays out a framework that will be helpful in providing greater consistency and comparability for the evolving practice of providing supplemental measures of pay as issuers attempt to better explain and investors seek to better assess the link between executive pay and company performance.

The Five Most Important Things Companies Need to Know and Do About the SEC’s Proposed CEO Pay Ratio Rules
September, 2013 | The Governance Center Blog
Last Wednesday the SEC met and issued 162 pages of proposed rules and commentary under Section 953(b) of the Dodd Frank Act, which requires U.S. public companies to disclose the ratio of the total compensation of the their median compensated employee to that of their CEO. This blog lays out the five most important things that companies need to know and do.

When Do Shareholders Care About CEO Pay?
August 2013 | Director Notes
Using simulated say-on-pay votes, this Director Notes investigates how different levels of CEO pay and company performance can interact to influence how shareholders vote.

U.S. Top Executive Compensation Report: 2013 Edition
August, 2013 | Research Report
As in 2011, the food and tobacco industry in 2012 had the highest median CEO total compensation ($7.64 million) and second-highest total cash compensation among the 22 industries we examined.

The CEO Pay Ratio
July, 2013 | The Governance Center Blog
There is little disagreement that rising income disparity is a serious issue for society and the economy.  The 2010 Dodd-Frank Act directed the SEC to issue regulations requiring public companies to disclose the ratio between the CEO’s compensation and that of a median employee to focus attention on income disparity within public companies. So what has happened?

Paul Noble vs. AAR Corp: Another Important Company Victory in the Proxy Injunction Lawsuit Wars
April, 2013 | The Governance Center Blog
Last Wednesday the U.S. District Court for the Northern District of Illinois issued its very important decision in Paul Noble vs. AAR Corp, et al., dismissing a shareholder plaintiff’s lawsuit which alleged that the directors of AAR Corp had violated their fiduciary duties to shareholders by not addressing certain questions in AAR’s 2012 proxy, which disclosures the plaintiff alleged were material to the company’s say-on-pay vote

Peer Groups Understanding CEO Compensation and a Proposal for a New Approach
April, 2013 | Director Notes
This report discusses the comparative peer benchmarking approach that most large companies rely on to design their executive compensation packages and suggests that boards consider an internally focused approach instead.

An Important Company Victory in the Proxy Disclosure Litigation Wars
February, 2013 | The Governance Center Blog
In a very important development in the current proxy disclosure litigation wars relating to annual meeting votes, last Thursday the Santa Clara County Superior Court sustained Symantec Corporation’s demurrer in Natalie Gordon vs. Symantec Corporation, et al., dismissing a shareholder lawsuit which had sought declaratory relief and damages against Symantec and its directors based on allegations that the directors had breached their fiduciary duties by failing to provide adequate disclosure to shareholders regarding Symantec’s say-on-pay vote in the company’s August 2012 proxy.

Proxy Voting Analytics (2008-2012)
January 2013 | Research Report
This report reviews voting data of SEC-registered corporations that held their AGMs between January 1 and June 30, 2012, and were in the Russell 3000 index at the time of their AGM.

Defining Pay in Pay for Performance
September, 2012 | Director Notes
This report examines pay-for-performance (PFP) issues to consider in making year-end compensation decisions, designing pay plans, and drafting 2013 proxies. It also offers examples of how to define “pay” for PFP analysis and disclosure purposes.

Linking Executive Compensation to Sustainability Performance
May, 2012 | Director Notes
This report discusses efforts by some companies to incorporate sustainability performance into executive compensation schemes, and provides an overview of recent shareholder proposals filed on this topic.

Influence of Proxy Advisory Firm Voting Recommendations on Say-on-Pay Votes and Executive Compensation Decisions
March, 2012 | Director Notes
This report examines evidence of the influence of proxy advisory firm voting recommendations on shareholder voting outcomes, particularly say-on-pay votes, and presents findings showing the impact of those firms on the design of executive pay programs.

Past Programs and Webcasts

Governance Watch: Outlook for 2018
14 November, 2017 | Governance Watch
What does the future hold for executive compensation? Doug Chia hosted a panel of seasoned experts who shared their predicitions for 2018 and what they believe will be the outcome for, among other things, future developments in executive compensation.

CEO and Executive Compensation Practices: 2017 Edition
16 August, 2017 | Human Capital Watch
This webcast will cover key findings from our compensation analysis regarding the CEO and the five highest-paid executives across the Russell 3000 and the S&P 500. The discussion will focus on the most recent data for 2016 as well as trends observed over the course of the past 6 years.

What Does the Income Inequality Debate Mean for Public Companies?
08 May, 2015 | Special Webcast
Hosted in collaboration with Cleary Gottlieb Steen & Hamilton LLP

Pay for Performance in the UK, Europe and for Global Companies – Innovative Measures
26 November, 2013 | Special Webcast
For corporations in the United Kingdom and Europe and for global companies based in the United States, India, and Asia, remuneration measures are a top topic among companies and investors.

Governance Watch: Supplemental Pay Disclosures
21 October, 2013 | Governance Watch^™
This Governance Watch webcast will announce the work product of The Conference Board Working Group on Supplemental Pay Disclosure, which seeks to develop consistent definitions for "realized" and "realizable" pay for use in company proxy reports.

Executive Compensation after Peer Groups
17 May, 2013 | Special Webcast
This webcast picks up on the recent Directors Roundtable debate and will explore what other factors should be considered by a compensation committee if peer-group benchmarking is deemphasized, as Prof. Elson and Mr. Ferrere suggest should be the case.

What You Need to Know about Performance-aligned Compensation
15 April 2013 | Conference KeyNotes
Experts from the California State Teachers’ Retirement System, University of Delaware and Farient Advisors discuss what Directors and senior executives need to know about performance-aligned compensation.

Executive Compensation and the Utility of Peer Groups
18 January 2013 | Director Roundtable
Professor Elson and Messrs. Ferrere and Kay debated their differing perspectives on executive compensation, including the role of peer groups and answered the question, “Are CEOs Compensated Appropriately?”

Why Executive Pay Is Important to Investors
03 December 2012 | Conference KeyNotes
Increasingly, investors insist on appropriate sharing of business risks and rewards between shareholders and management. An investor discusses how compensation committees should utilize detailed and reliable analyses and metrics to connect the dots.

Senior Management Compensation: Getting Goal Setting Right
15 May, 2012 | Special Webcast
Join a panel of experts who will discuss techniques and tools for getting goal-setting right, pitfalls to avoid, and other key learnings from practitioners like yourselves.

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