2023 Say on Pay Reports S&P 500 and Russell 3000 Failure Rate & Pay Vote Analysis

Russell 3000 equity plan proposals are facing historically low shareholder support and higher failure rates in 2023. These headwinds likely reflect both increased shareholder and proxy advisor expectations in equity plan sizing and increased share usage pressure at companies in depressed markets.

Competitive pay benchmarking, incentive goal rigor analyses, and more traditional realizable pay analyses provide a more exhaustive set of tools to calibrate and assess pay and performance.

CAP to SCT ratios remain positively correlated with TSR over the reported period.

Our year-end report recaps proxy voting results and trends for 2022.

Vote results between the two indices have diverged due to a fractured governance landscape and differentiated expectations for “good” governance at large- and small-cap companies.

This proxy season will revert toward the pre-pandemic focus on financial metrics and conventional pay-for-performance structures.

The historically high S&P 500 failure rate is likely to remain through year-end, while the Russell 3000 failure rate has stayed steady since June.

Many have long maintained that in the long run, investing in stakeholders is good for shareholders— and that stakeholders and shareholders are not an either/or proposition, but rather a both/and proposition where addressing stakeholders leads to better long-term shareholder returns.