The number of companies whose executive pay plans failed to receive majority support from shareholders as of July 2 is down slightly from mid-July last year (55 vs. 58), with the number of S&P 500 failures slightly higher than for all of 2019 (nine vs. seven) and each of the prior years except 2012. In the past, S&P 500 companies have enjoyed more say-on-pay support than smaller companies.

Reasons for failures. Reasons some investors cited for voting against say on pay at the nine S&P 500 company failures, aggregated by Proxy Insight, were driven by pay-for-performance disconnects, including:


  • Modification of performance targets to make them easier to achieve
  • Lack of quantifiable (vs qualitative) performance metrics
  • Lack of transparency around performance goals, lack of goal rigor, and/or use of discretion
  • One-off equity grants, especially when not sufficiently performance-based
  • Mega grants covering current and future years
  • Payment of cash severance on retirement in lieu of forfeited equity

No other surprises despite pandemic. Executive pay decisions for 2019 predated the market gyrations brought on by the COVID-19 pandemic and say-on-pay vote results have been generally unaffected. Most indicators of shareholder support remain strong so far and consistent with prior years:


  • Out of 2,548 all-size companies reporting results, 55 (~2.2%) received less than 50% support, a slightly lower rate than 58 out of 2,528 (~2.3%) as of July 12, 2019.
  • Votes continue to average just over 90% in favor of companies’ executive pay programs.
  • Favorable votes of 90% or higher at individual companies are similar to last year (down slightly from 77% in 2019 to 75% in 2020 for S&P 500 companies and from 73% to 72% for all companies).
  • ISS has recommended shareholders vote against fewer say-on-pay proposals (11% so far this year compared with 13% as of July 12, 2019, and for all of 2019).

Say-on-pay summary results, 2011 to 2020 (as of July 2, 2020)

Looking ahead. The reasons for the say-on-pay failures indicate areas of concern investors are likely to focus on when they next vote on say on pay, including actions companies take to address the volatile market and global pandemic. Companies whose fiscal year ended June 30 will be the first to see the impact, and should engage with shareholders and ensure their proxy disclosure explains the rationale for pay decisions. See Managing incentives during uncertain times for a discussion of 2020 compensation decisions in response to COVID-19 and Proxy advisers weigh in on COVID-19's impact on pay and governance.

Carol Silverman
Carol Silverman

Partner, Senior Legal Consultant

Amy Knieriem
Amy Knieriem

Senior Principal, Senior Legal Consultant

Michael Yoon
Michael Yoon

Senior Analyst

Adam Bogucki
Adam Bogucki

Principal, Executive Compensation Consultant

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