May 26, 2022 Executive Compensation Shareholder Voting Reports

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

The Divergence in Average Vote Results Between S&P 500 and Russell 3000 Continues but Failure Rates Decline

The S&P 500 average vote result (88.3%) is below the index’s average at this time last year (89.6%), while the Russell 3000’s average vote result of 90.4% is similar to the same period last year. The 210-basis point spread between average vote results for the Russell 3000 and S&P 500 is equal to the spread at year-end in 2021. We anticipate this trend will continue throughout this proxy season. Despite the lower S&P 500 average vote result, the S&P 500 failure rate of 3.4% is 100-basis points lower than this time last year. Similarly, the Russell 3000 failure rate of 2.7% is below the 3.1% failure rate observed at this time last year.

Lower vote support for E&S shareholder proposals has continued in 2022, with 25% median support for social proposals and 26% median support for environmental proposals. When compared to the same period as last year, the number of social and environmental proposals that have passed has decreased by 11 percentage points and 20 percentage points, respectively. Average vote support for Director nominees (95.3%) is 20 basis points higher than the year-end support observed in 2021.

Contributors

Todd Sirras

Austin Vanbastelaer

Justin Beck

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