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The average support for say-on-pay during this period was 90.4 percent, with 76 percent receiving support above 90 percent.
Proxy advisory firms such as Institutional Shareholder Services (ISS) have become very influential in the say-on-pay process As a result, if a company receives a negative proxy voting recommendation from a proxy advisory firm, it often (but not always) prepares additional material in support of its executive compensation program.
Some consumers, governmental authorities, politicians and media outlets are also paying attention to pay ratio disclosures.
Board intelligence service provider Equilar reported that as of September 17, 2018, the median CEO pay ratio was 64.2 to 1.
Executive compensation consultant Semler Brossy’s July 12, 2018 report (the Semler Brossy report) observed that the pay ratio “is more heavily influenced by the magnitude and variance in CEO compensation than by median employee compensation.” Semler Brossy also reported that “CEO compensation scales as company size increases, while median employee compensation has little correlation with company size.” It is not clear how much impact pay ratio disclosure has on investors.
As a result, companies should focus not only on the pay ratio calculation and proxy disclosure, but also on how they present and discuss this required public information both within their organization and to the public at large.
While there had been some predictions that pay ratio would be eliminated with Republican control of both the White House and Congress, there now appear to be other, higher priorities for legislative actions.
When plans are submitted for shareholder approval, the proxy disclosure should be sufficiently clear to establish that the shareholder vote was obtained on a fully informed basis.