September 29, 2022 Executive Compensation Shareholder Voting & Say on Pay Reports

2022 Say on Pay Reports S&P 500 and Russell 3000 Failure Rate & Pay Vote Analysis

Failure Rates Tick Upwards as Proxy Season Comes to a Close

The failure rates for the Russell 3000 (3.5%) and S&P 500 (4.4%) have remained high throughout the year, and are above the failure rates at this time last year. Additionally, average vote results for the Russell 3000 (89.4%) and S&P 500 (87.5%) are 110 and 210 basis points lower than the averages at this time last year. These results reflect the longer term trend of declining Say on Pay support and the divergence between Russell 3000 and S&P 500 vote results we discussed in our paper, “Implications of Elevated Shareholder Expectations.” 

The number of E&S shareholder proposals increased year-over-year, while vote support decreased. Median support for environmental and social proposals dropped by 10 and 19 percentage points, respectively. Average vote support for equity proposals (89.3%) is 40 basis points higher than the support observed at this time last year. 

Vote support for E&S shareholder proposals is lower than past years; median support for both environmental and social proposals has dropped by 11% and 10%, respectively. Average vote support for Director nominees (95.3%) is 20 basis points lower than the year-end support observed in 2021. 

Contributors

Todd Sirras

Austin Vanbastelaer

Justin Beck

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