Last proxy season 36 Russell 3000 companies lost shareholder advisory votes on executive compensation, also known as say-on-pay. Although only a small minority experienced failed votes, say-on-pay is having a significant effect on corporate pay practices.
Many companies are making changes to their compensation plans, especially those that garnered lukewarm support or lower from shareholders and those that saw proxy advisory firms recommend that shareholders vote against their plans. A new study from Towers Watson finds that of companies with less than 80 percent shareholder support and at least one negative vote recommendation, 71 percent plan to spend more time and effort next year to improve voting results next season. Meanwhile, 41 percent of companies who received at least one negative advisory firm recommendation say they plan to spend more effort in the next proxy season.
