Pay for Performance: Shareholders Question Executive Compensation

It’s that time of year again, when shareholders’ meetings are filling up corporate calendars. High on the varied agendas is the common topic of executive compensation, an ongoing issue that is still stirring up a ruckus among stakeholders (stockholders plus activists, organizations, and individuals with an interest in a company). In the UK, shareholder advisory firms have issued many more recommendations to vote against FTSE firms’ pay policies this year than last, reports The Economist. There’s been some progress: the percentage of S&P firms tying pay to performance has grown from 63% to 83% since 2011, according to Equilar, an executive compensation research firm. More transparent, more straightforward compensation structures will clear the air on this subject.

John Howell, Editorial Director