Early Say On Pay Trends Persist in 2013 Proxy Season.

June 13, 2013

Only 12 S&P 500 companies reported say on pay results this week all with passing results, bringing the total number of companies receiving majority support to 390 out of 393 (99.24%) companies with an average of 91.31% and a median of 95.37%.  With nearly 80 percent of the S&P 500 having reported SOP results, several trends the Center identified early in the proxy season have been solidified.  First, S&P 500 companies are averaging higher shareholder support than in 2012 (+1.93% higher average) and 2011 (+2.27% higher average).  Second, the higher results are likely a product of extensive shareholder engagement efforts by companies which were prominently featured in both proxy statements and proxy advisor reports alike.  Also a correlating factor was a noted drop in ISS "Against" recommendations.  Compared to this point a year ago, ISS has issued two-thirds the number of "Against" recommendation in 2013.  This has led to a nearly 20% decrease in the number of companies with wild year-over-year swings in SOP results.  Finally, consistency in ISS recommendations has a very high correlation to low year-over-year changes in SOP support.  Companies receiving the same ISS recommendation in 2013 as in 2012 have a negligible median change in support of 0.02%.  Even companies receiving back-to-back "Against" recommendations are averaging an increase in SOP support of over 6%.  

The Center's full SOP report is available below.