Executive compensation remains a key issue for institutional investors around the world, according to a recent global FTI Consulting survey of more than 170 large investors including institutional investment firms, hedge funds and private wealth managers in North America, Europe, South America and Asia. The survey highlighted the following principal shareholder issues relating to executive compensation.
Perspectives on Pay and Program Design
- 88% of investors surveyed said that executive compensation is important to their investment decisions.
- More than half of respondents support deferral of variable compensation into shares (58%) and disclosure of specific performance targets (67%).
Say on Pay and Shareholder Voice
- 62% of investors surveyed want an annual say on pay vote.
- 72% of respondents believe that companies should respond to a say on pay vote or shareholder resolution that fails to receive more than 30 percent support, which 15% be06/02/2012lieve threshold support of 10% or less is enough to warrant a specific corporate response.
Engagement Expectations
- 92% of investor respondents believe companies should to engage in periodic corporate governance roadshows, with over half (58%) expecting it annually.
- 15% of investors expect the chair of the board to be “constantly accessible”, and 52% expect to hear from him or her at least annually.
