Paul Herman, CEO and founder of HIP (Human Impact + Profit) Investor Inc. It is time for even more shareholders to vote against pay for no other reason than that it is excessive and immoral.” It's good to see that more shareholders voted to show their opposition to excessive CEO pay in 2021, but, frankly, it’s not enough. “While CEO compensation has grown 940% since 1978, typical worker compensation has only risen by 12%. Secretary of Labor, and co-founder of Inequality Media : Robert Reich, professor, author, and former U.S. The growth in CEO pay is unjustified and not in the best interests of shareholders.” But it is time for more shareholders to vote against the quantum of pay, not just particular bad practices. Some boards acted as if pay for performance didn’t matter when COVID-19 was involved, and shareholders angrily rejected those packages. While compensation committees like to tout the amount of the pay package that is ‘at-risk,’ the pandemic challenged the notion that CEO pay will always rise and fall with the performance of the company. “There’s never been a year with this number of high opposition votes against pay in the eight years of this report. Rosanna Landis Weaver, executive compensation program manager at As You Sow and report author: In some cases, CEOs presented here no longer hold that position. *The pay packages evaluated were those where votes were cast prior to June 30, 2021. This ratchets up the pay of all CEOs and shareholders do not seem to object. Because CEO pay is highly peer-group linked, an increase that may appear justified at one company then inflates pay at many other companies in the company’s peer group. For example, companies that changed CEO pay-performance metrics this year using COVID-19 as the excuse received high levels of negative votes from shareholders. It does not seem to be based on the total amount of pay. This increase in opposition seems to be based on more companies employing questionable practices and metrics in setting CEO pay. Using a calculation that excludes management and “insiders” and includes just institutional shareholders, the number of CEO pay packages that were rejected by more than a majority of institutionally held shares was 29, almost twice the 15 we saw last year. A record 16 companies had CEO pay packages rejected by more than half of the shareholders, a 60 percent increase from the ten in 2020 and more than double the seven in 2019. Cumulating these underperformances over all seven years of this report series, a rolling portfolio of the most 100 overpaying companies each year would have returned a full 20 percentage points less than the S&P 500 average.Ģ021 showed substantial increases in opposition to CEO pay packages. Since As You Sow published the first “The Most Overpaid CEOs” report in 2015, in each and every report the companies with the most overpaid CEOs have had lower returns to shareholders than the average S&P 500 company. 24, 2022- As You Sow today released its 8th annual “ The 100 Most Overpaid CEOs: Are Fund Managers Asleep at the Wheel?” report, which focuses on how pension and financial fund managers hold companies accountable for excessive compensation. ET with Robert Reich, Rosanna Landis Weaver, and Paul Herman.
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