It is often claimed that executives reap rewards from favourable market tailwinds they did nothing to create. This column uses two decades of Danish data to argue that this ‘pay for luck’ critique requires more nuance. While CEOs do receive higher pay when global conditions are favourable, the authors find that boards reward the effort required to capitalise on those favourable conditions as well as to mitigate losses in the face of negative shocks. The findings suggest that globalisation doesn't just increase pay – it fundamentally changes why and how CEOs are compensated. READ MORE
The Corporate and Billionaire Opponents of San Francisco’s Overpaid Executive Tax
San Francisco voters will soon have a chance to weigh in on a proposed increase to the city’s Overpaid Executive Tax. This proposal would give large corporations with huge gaps between CEO and worker pay a choice between narrowing those gaps to reasonable levels or contributing a bit more to local public services at a time of severe budget shortfalls. Deep-pocketed donors are building a huge war chest to block the initiative. READ MORE
10 high-paying careers where women make up the majority of workers—most pay more than $100,000
While progress toward gender parity remains slow, several career paths offer above-average representation of women as well as high pay, according to a report from Resume Genius published Mar. 3.
Resume Genius, an online career platform and resume builder, identified the top 10 careers with high median salaries and projected job growth in which women make up 50% or more of workers, using data from the U.S. Bureau of Labor Statistics. READ MORE
DEI-Tied Executive Pay Loses Ground at Companies Amid Backlash
More companies are ditching diversity, equity, and inclusion metrics to help determine their executives’ compensation amid a conservative backlash against corporate DEI programs.
The pullback, however, doesn’t mean the popular tie-in has been abandoned. In fact, a majority of S&P 500 companies and more than 40% of Russell 3000 firms that use environmental, social, and governance metrics in executive pay still link compensation to achieving DEI goals, according to a report the Conference Board, ESGAUGE, and FW Cook released Thursday. READ MORE
Research finds CEOs innovate — or don’t — based on compensation packages and input from analysts
West Virginia University research shows the stock market shapes chief executive officers’ commitments to innovation through mechanisms that range from CEO pay packages to feedback from financial analysts.
“The investment industry usually views financial analysts’ feedback, such as earnings forecasts, as impeding innovation because of the pressure the feedback puts on CEOs,” said Xinchun Wang, associate professor of marketing at the WVU John Chambers College of Business and Economics. “But not all feedback provided by analysts generates that kind of pressure. Stock recommendations actually foster explorative activities like research and development — investments that, although risky, can positively affect long-term returns.” READ MORE
Elon Musk won’t get his $55 billion pay package after all
Elon Musk isn’t going to get that $55 billion pay package after all, a Delaware Chancery Court judge has ruled.
Tesla shareholders approved the package in 2018, which gave Musk incentive to hit specific milestones, including a market valuation of $650 billion, which was more than 10 times the valuation at the time. The trial hinged on a specific question: did Musk mislead the shareholders when he gave them the plan? READ MORE
IBM investors staged 2021 revolt over exec pay
IBM moved to appease shareholders that last year revolted against executive compensation proposals when they contested the massive one-time equity award granted to former Red Hat boss Jim Whitehurst.
Whitehurst, who was made IBM President following Big Blue's $34bn buy of Red Hat, was to be handed a compensation package of more than $27m last year, including $22.4m in stock awards. This upset investors. READ MORE
Will the SEC Finally Approve a Tougher Clawback Rule?
During a recent speech, Securities and Exchange Commission Chair Gary Gensler said he would be pushing his staff to recommend rules for clawing back public company executive pay. READ MORE
SEC proposes new rule mandating funds disclose votes on executive pay
The Securities and Exchange Commission voted Wednesday to propose several new rules related to institutional investment funds’ votes on proxy proposals, including whether they support companies’ compensation packages for their top executives.
The Dodd-Frank financial reform law, passed in the wake of the 2008 financial crisis, required public companies to hold non-binding shareholder proxy votes on the compensation of their most highly paid executives. It also required companies to disclose so-called “golden parachute” agreements, or compensation arrangements for executives in the event of a merger, acquisition or other transaction. READ MORE