Early 2014 Results Positive for Say-on-Pay

By Mary Hughes  

April 16 -- Early say-on-pay results for 2014 are the most favorable since the beginning of say-on-pay in 2011, with just one failure reported, a compensation consultant said during an April 16 webcast on executive pay.

James Kroll, a director with Towers Watson's executive compensation consulting practice in New York, said that negative vote recommendations are also at an all-time low--at 7 percent versus 14 percent in 2013--and average support for executive pay programs is at 93 percent, up from 90 percent in 2013.

Early 2014 voting results are based on 196 companies in the Russell 3000 Index, reporting results between Jan. 1 and April 11.

Final rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act require public companies to hold a say-on-pay vote at least once every three years . A majority of companies (about 82 percent) hold votes annually, with just 17 percent voting every three years, according to a 2013 Towers Watson survey .

Reasons for Positivity

Several factors are at play in these early results, including better company performance and a better understanding by companies of the drivers around say-on-pay, Kroll said.

It helped that 2013 was an exceptional year from a stock market perspective, with median share prices up approximately 30 percent--after a strong 2012 when share prices were up 15 percent--said New York-based Todd Lippincott, leader of Towers Watson's executive compensation consulting practice for the Americas.


To contact the reporter on this story: Mary Hughes in Washington at mhughes@bna.com

To contact the editor responsible for this story: Sue Doyle at sdoyle@bna.com