Say on Pay Update: Investor Support Down (May 20, 2022)

Support for Say on Pay continues to decline in 2022, with several high-profile failures this year. A recent Center review of ISS filings found the current Say on Pay failure rate in the Russell 3000 is 3%; for the S&P 500, it is 4.1%. This is inching closer to last year’s unusually high rates. In addition, as ISS’s recent review pointed out, median CEO pay rose by 9.2% for the S&P 500 and 39.5% for the Russell 3000 (excluding S&P 500) in 2021, which may result in more investor scrutiny of Say on Pay.

Meanwhile, Semler Brossy’s latest report (as of May 12) found that the current Russell 3000 average vote result is 90.5% (similar to last year) while S&P 500 average is 87.3% (even lower than last year). 

• JP Morgan Chase received only 31% shareholder support in an unusual rebuke of popular CEO Jamie Dimon; the low vote results were likely a result of a $52.6 million award as part of Dimon’s 2021 pay package. Although the award, which took the form of 1.5 million options that can only be exercised in 2026, was rare for the company and disclosed as part of its leadership transition strategy, proxy advisory firms claimed it was “excessive” amid “tepid relative performance.”
  
  
• Coca-Cola saw a sharp decline in investor support, from 94% to just 50.5%, over a $3.2 million special award for CEO James Quincey along with a $12 million consulting deal made with the company’s former general counsel.