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Investor protests against executive compensation have reached an all-time high because people are dissatisfied with the package rewritten during the pandemic to make it easier for CEOs to earn tens of millions of dollars.
Data provider ISS Corporate Solutions said Halliburton (Halliburton) ranked 13th in this year’s S&P 500 Index and received less than 50% support at the annual meeting.
Since the 2010 Dodd-Frank Financial Reform Act (Dodd-Frank) enforced non-binding executive compensation voting, the number of failures in 2021 was the highest. In 2020, 12 S&P 500 companies failed to pass this “pay-as-you-go” vote.
In the coming weeks, more than one-third of S&P 500 companies plan to hold shareholder meetings, and the number of failed dividend votes is expected to surge.
ISS Corporate Solutions executive director Brian Johnson said: “This year we are likely to get 20 unsuccessful votes.”
Although the vote is not binding, shareholders’ dissatisfaction with salary cannot be easily shaken off. Morgan Stanley (Morgan Stanley) said in a report on May 21 that companies that failed the vote often performed poorly. The bank said: “Between 2015 and 2019, failure to pass the payment to say that the ticket is a major signal of underperformance in the stock price.”
Johnson said that this year’s resistance to bonuses was mainly due to the 2020 board of directors’ decision to rewrite the long-term incentive plan to make performance goals easier to achieve.
Last year, as companies closed operations and laid off workers, hundreds of company boards reset their bonus plans to exclude the worst months of the pandemic economy from the bonus standard, or to add new bonus indicators to alleviate the company’s bleak The share price hit.
Board members of the Compensation Committee must report that 2020 is “almost a story of two periods.” Former CEO Betsy Atkins stated that he had worked in many locations including Wynn Resort and SL Green. Serve on the board of directors.
She said: “The January and February annual plans were approved, and the situation looked normal or strong, and then there was a pandemic.” When the company’s prospects were very uncertain, the committee she sat on encouraged the CEO to give up some parts. Or all salary to “expand cash flow.”
However, other compensation plans were finalized due to excessive daily requirements. Morgan Stanley said that Intel, which failed to pass the salary vote earlier this month, has provided new CEO Pat Gelsinger with a total compensation package of US$110 million.
Support for Starbucks executive compensation fell to 47.5% from 84.5% in the same period last year. Morgan Stanley said that CEO Kevin Johnson has received two special bonuses in recent years, and the maximum bonus is $50 million, which is accused of being too large.
The failed salary vote illustrates the changing attitude of the world’s largest asset management company. BlackRock, Vanguard and State Street said they have voted against some companies that failed to pass the vote this year. For example, after State Street supported Starbucks in 2020, it voted against Starbucks this year.
Richard Fields, a partner of the Kings Law Firm, said: “Especially this year, we have seen a huge change. Large asset management companies have become more confident and made it clear that quiet, behind-the-scenes participation is not The only tool in the toolbox. And Spalding. “A sleeping giant is awakened. “
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