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Protests by investors over executive salaries have been on the rise, with packages being rewritten in the pandemic deepening to make it easier for CEOs to make $ 10 million.
On Thursday, at the 13th annual meeting in Halliburton, the S&P 500 became the 13th company to earn less than 50 percent of its salary, according to data provider ISS Corporate Solutions.
The amount of bankruptcy in 2021 marks the highest number since the 2010 Dodd-Frank financial reform law mandated executive salary votes. Twelve S&P 500 companies failed to make such a “say in return” in 2020.
When more than a third of S&P 500 companies are scheduled to hold shareholder meetings in the weeks leading up to that, they are expected to increase the number of bonus votes they have failed.
“It’s very possible to get 20 votes that we failed this year,” said Brian Johnson, executive director of ISS Corporate Solutions.
Although the votes are not binding, the dissatisfaction of the shareholders with their salary cannot be easily ruled out. Morgan Stanley said in a May 21 report that companies that fail to get paid votes are inadequate. “Between 2015 and 2019, the failed pay votes were the red flag material to get stock price underperformance,” the bank said.
This year’s rebellion against bonuses largely lies in the commission’s decisions in 2020 to rewrite long-term incentive plans to make it easier to meet performance targets, Johnson said.
Last year when companies closed operations and laid off employees, hundreds of company boards reinstated bonus plans to exclude the worst months of the pandemic’s economic success from exceeding bonus criteria or adding new bonus metrics to reduce the company’s share price blow.
Betsy Atkins, a former chief executive who serves on several committees, said Betsy Atkins, a member of the Wynn Resorts and SL Green committees, said the remuneration committee’s board members had to look into “it’s a two-time story” by 2020.
“It was in January and February when the annual plan was approved and things seemed normal or solid, and then there was the pandemic,” he said. The committees he included encouraged CEOs to set aside part or all of their salaries when it was very certain that the company’s vision of “stretching the money track” was very certain.
But other salary plans were devised to achieve the usual abuse. Morgan Stanley reported that Intel, when it failed to pay the vote earlier this month, offered the new CEO Pat Gelsinger a $ 110 million payment package.
Payroll support for Starbucks executives rose to 47.5% from 84.5 percent the previous year. CEO Kevin Johnson received two special bonuses in recent years, and was criticized for grossing up to $ 50 million, Morgan Stanley said.
Paid voting failures show a changing attitude of the world’s largest asset managers. BlackRock, Vanguard and State Street have said they have voted against some companies that did not vote this year. For example, State Street voted against Starbucks this year after helping in 2020.
“Especially this year we’ve seen a tremendous change in the fact that big asset managers have had a bigger claim and have made it clear that behind-the-scenes commitment isn’t the only tool in the toolbox,” said King Fields, a law firm partner. & Spalding. “A sleeping giant has woken up.”
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