Proxy Preview 2019 reveals intensified shareholder pressure on corporations across a wide range of ESG issues from climate and political spending to women. Investors with a conscience; we are having a bigger impact every year. Download the report and/or watch webinar here. Continue Reading →
Tag Archives | Rosanna Landis Weaver
The CEO Pay Machine: How it Trashes America and How to Stop it (Amazon) by Steven Clifford should be mandatory reading for all compensation committees and those who vote proxies for large funds. The book is easily read and understood by the layperson. It also includes the fact-based evidence needed to convince fiduciaries that voting against most executive pay packages is one of the first steps to restoring shareholder value, company sustainability and the very foundations of American democracy.
Why combine CEO and chair positions or pay executives with options when both practices lead to poor results? We don’t except “everyone else does it” as an excuse for harmful behavior from our teenagers; why should we accept it as a reason from compensation consultants and the former CEOs sitting on most corporate boards? Clifford also outlines possible remedies but nothing will be done unless we shift public opinion. If widely read and discussed, The CEO Pay Machine could be central to change. Continue Reading →
The 100 Most Overpaid CEOs: Are Fund Managers Asleep at the Wheel? is the second such report from As You Sow in two years. I hope it continues as an annual tradition. I urge everyone to read it. Rosanna Landis Weaver, Jackie Cook and others contributing to this project did a great job. As Nell Minow said of the report:
Overpaid CEOs: Rational Apathy at Investment Funds
Below are a few highlights from their press release and executive summary:
CEO pay grew an astounding 997% over the past 36 years, greatly outpacing the growth in the cost of living, the productivity of the economy, and the stock market, disproving the claim that the growth in CEO pay reflects the “performance” of the company, the value of its stock, or the ability of the CEO to do anything but disproportionately raise the amount of his or her pay.
In the last year, pay for S&P 500 CEOs has risen (by some estimates up to 15.6%), yet the value of the shares of these companies actually declined slightly- despite massive expenditures of corporate funds on stock buybacks designed to increase the value of those shares. After five years of delay the SEC finally adopted rules that will allow shareholders to better understand the gap between the pay of the CEO and other employees of the corporation. The SEC is also moving forward on rules that will help expose the gap between the pay of the CEO and the performance of the companies’ shares in the stock market. Furthermore, some mutual funds and pension funds began to better exercise their fiduciary responsibility by more frequently voting down some of the most outrageous CEO pay packages.
Today more and more investors own shares through mutual funds, often investing in S&P 500 index funds. Individual investors are not in a position to sell their stakes in a company. The funds themselves are subject to a number of well-documented conflicts of interest and to what economists refer to with the oxymoronic-sounding term “rational apathy,” to reflect the expense of oversight in comparison to a pro rata share of any benefits.