Executive Compensation: A 2013 Opinion Survey of Compensation Committee Members
from Corporate Board Member and Pay Governance
NYSE Governance Services, Corporate Board Member and Pay Governance LLC collaborated in the fall of 2013 to survey the opinions of compensation committee members at U.S. publicly traded companies to tap into their views regarding the state of executive pay. Specifically, the survey sought to ascertain what compensation committee members believe about compensation policies and design; the effects on corporate governance of compensation policies and compliance regulations; the alignment of executive pay and shareholders’ interests; the effectiveness of proxy disclosure; and the impact on say on pay votes of proxy advisors. In addition, the research investigated what actions companies have taken, or anticipate taking, as a result of any say on pay challenges. The following report highlights the key findings and summary analysis from this study, which comprises 323 compensation committee member survey responses.
Positive or Emerging Developments
The survey demonstrated a number of positive developments and emerging trends. It shows that compensation programs at U.S. publicly traded companies continue to become more aligned with shareholders’ interests in the wake of the implementation of Dodd-Frank regulations. Despite arguments to the contrary posed by some proxy advisory firms, some institutional investors, and shareholder activists, most compensation committee members believe that the vast majority of shareholders support their executive pay programs and thus have shown their support via positive say on pay votes over the last three years. This affirms that compensation committees and boards are setting up pay plans that are successfully aligned with shareholders’ interests. The following are a few key findings that further support this view.