Are companies incorporating ESG factors into executive remuneration?

The last decade has seen a steady increase in the focus on Environmental, Social and Governance (ESG) factors from a range of stakeholders and that growing scrutiny appears to have reached a crescendo over the past 18 months. Only the topic of executive remuneration continues to be discussed as frequently as ESG.

FTI & CGLytics have conducted an analysis to determine whether those two topics are increasingly converging. Download the white paper to find out more.

A white paper from FTI Consulting and CGLytics

Are companies incorporating ESG factors into executive remuneration?

The last decade has seen a steady increase in the focus on Environmental, Social and Governance (ESG) factors from a range of stakeholders and that growing scrutiny appears to have reached a crescendo over the past 18 months. Only the topic of executive remuneration continues to be discussed as frequently as ESG.

FTI & CGLytics have conducted an analysis to determine whether those two topics are increasingly converging. While there is evidence that the number of companies including some form of ESG-measure has grown, the proportion of overall pay determined directly by performance against ESG criteria remains at the margin.

Download the report to find out more.

DOWNLOAD THE REPORT

Latest Industry News, Views & Information

  • All
  • Blog

The increasing trend of shareholder opposition to executive pay

Votes against executive remuneration are growing. In this article we look at this change in the European indices and the S&P500.

Deutsche Bank: How CGLytics Tools Inform Glass Lewis’ Pay and Governance Analysis

Glass Lewis’ assessment of executive remuneration reflects a balance of quantitative and qualitative considerations, with CGLytics’ suite of tools underpinning the quantitative component. In the following discussion, we review the quantitative assessment with respect to Deutsche Bank, using CGLytics’ analytical tools.

Shutterfly: A Glass Lewis Use Case

Glass Lewis takes a look at the recent proposed amendment to the Shutterfly equity compensation program and the response from shareholders.

How to take testing of equity-based compensation plans into your own hands?

Download the whitepaper and learn more about equity-based compensation plan best practice and how the ECM is supporting decision-making for Say on Pay.

How to take testing of equity-based compensation plans into your own hands?

Equity-based compensation proposals have attracted high levels of shareholder disapproval in the past, which costs a company valuable time and money. Both companies and investors need to ensure equity plans drive the company forward by supporting goals without being too costly or dilutive.

  • What are the common concerns for companies and investors surrounding equity compensation plans?
  • What should both companies and investors take into account when designing, amending or assessing equity plans?
  • How can Glass Lewis’ Equity Compensation Model (ECM) help users understand the strengths and weaknesses of plans?

Download the whitepaper and learn more about equity compensation plan best practice and how the ECM is supporting decision-making for Say on Pay.

DOWNLOAD THE REPORT

Latest Industry News, Views & Information

  • All
  • Blog

The increasing trend of shareholder opposition to executive pay

Votes against executive remuneration are growing. In this article we look at this change in the European indices and the S&P500.

Deutsche Bank: How CGLytics Tools Inform Glass Lewis’ Pay and Governance Analysis

Glass Lewis’ assessment of executive remuneration reflects a balance of quantitative and qualitative considerations, with CGLytics’ suite of tools underpinning the quantitative component. In the following discussion, we review the quantitative assessment with respect to Deutsche Bank, using CGLytics’ analytical tools.

Shutterfly: A Glass Lewis Use Case

Glass Lewis takes a look at the recent proposed amendment to the Shutterfly equity compensation program and the response from shareholders.

Deutsche Bank: How CGLytics Tools Inform Glass Lewis’ Pay and Governance Analysis

Glass Lewis’ assessment of executive remuneration reflects a balance of quantitative and qualitative considerations, with CGLytics’ suite of tools underpinning the quantitative component. In the following discussion, we review the quantitative assessment with respect to Deutsche Bank, using CGLytics’ analytical tools.

For public companies based in Germany, Glass Lewis’ assessment of a company’s remuneration practices balances quantitative data with a variety of qualitative considerations. Since its introduction in 2018, CGLytics’ data analysis has helped us understand the pay structure and identify both quantum-related and broader governance issues.

CGLytics’ analysis of main profitability indicators illustrate the link between pay and performance. The tools are particularly useful when assessing a company’s remuneration in relation to local and European peers. That’s all the more important in Germany, where large companies usually include a significant number of US companies in their benchmarks, leading to a potentially skewed context for remuneration decisions and ultimate payouts.

In the following discussion, we describe how CGLytics’ analytical tools informed Glass Lewis’ review of Deutsche Bank ahead of the 2019 AGM.

Overview of DBK

Annual Say-on-Pay won’t be mandatory in Germany until SRD II is implemented, allowing Deutsche Bank to omit any remuneration-related votes from its 2019 AGM agenda; the multinational last sought shareholder approval of its remuneration policy in 2017. Nonetheless, for large cap companies Glass Lewis provides a remuneration analysis comprising CGLytics graphs and tables and a write-up to summarise any material issues. Even when there is no proposal focused solely on remuneration, this analysis informs our assessment of overall governance practices and the performance of the board, its committees and directors. Beyond the Proxy Paper report and voting recommendations, the analysis helps us to shape our engagement agenda and identify areas for further research.

Deutsche Bank’s KPIs have been consistently negative in the past years due to a number of legal disputes and organisational issues. In 2017, the Bank posted its third consecutive loss. Awards for those three years would have partially vested, mostly due to the achievement of the CET1 capital ratio and relative TSR targets. However, the management board decided to waive all variable remuneration payments and grants for fiscal years 2015 to 2017, in order to demonstrate that shareholders’ experience was reflected in the pay of top executives.

In 2018, the Bank reported its first consolidated net profit since 2014 and resumed the payment and grant of short- and long-term awards to management board members.

Overview of CGLytics Remuneration Analysis

CGLytics’ relative indicators confirmed that the company’s performance was below peers, while payouts were above. Moreover, the  analysis raised concerns about an excessive use of upward discretion and costs related to executive turnover.

Using CGLytics’ data, our analysis showed a poor alignment between pay and performance during an ongoing period of subpar results. In recent years, the management board’s waiver of variable remuneration had demonstrated a good appreciation of shareholders’ concerns – but a return to profitability in 2018 prompted an immediate return to the payment of incentives which appeared excessive and premature. While we acknowledged an improvement in performance, CGLytics showed that Deutsche’s EPS, ROA and ROE were still negative and below peers. Similarly, CGLytics’ analysis of relative TSR and realised pay showed a disconnect between above-median CEO costs and shareholder returns that remained significantly below peers.

The awards granted last year aren’t reflected in the charts below due to their deferral structure – nonetheless, CEO remuneration was still higher than that of German and European peers, highlighting quantum concerns and a wider issue of executive succession planning and turnover costs. Last year, departed Deutsche executives, many of whom presided over a period of underperformance, received over €7 million in immediate non-compete payments, with additional severance payments totalling millions to be paid in tranches over the next few years.

Source: CGLytics Compensation Data and Models

Glass Lewis Perspective

The context for this quantitative analysis centred on Deutsche’s role as a multinational bank. In the case of large  financial institutions , we recognise that the use of US and international peers is – to a certain extent – reasonable. In addition, we recognise that banks subject to CRD IV must cap variable pay at 200% of fixed, which tends to inflate fixed pay levels. We also noted that 2018 awards were subject to extensive deferral requirements.

On balance, while cognisant of the competitive marketplace, we remained concerned by salary levels – and moreover by the high cost of severance, with some payments set to continue for years to come, along with the level of  variable pay awarded given shareholder returns.

Conclusion

Deutsche didn’t have any remuneration-specific proposals on its AGM agenda in 2019. Nonetheless, the executive pay, succession planning and broader governance issues raised by CGLytics’ analysis contributed to our overall assessment of the company’s governance, and our recommendation that shareholders vote against the ratification of supervisory board acts.

Access Glass Lewis’ Say on Pay analysis – Available through CGLytics

Glass Lewis uses CGLytics as it’s global compensation data provider. For the 2020 proxy season our data will provide the basis of Glass Lewis’ Say on Pay recommendations.

 

Learn More

Latest Industry News, Views & Information

The increasing trend of shareholder opposition to executive pay

Votes against executive remuneration are growing. In this article we look at this change in the European indices and the S&P500.

Shutterfly: A Glass Lewis Use Case

Glass Lewis takes a look at the recent proposed amendment to the Shutterfly equity compensation program and the response from shareholders.

Tailoring Executive Remuneration Analysis Using CGLytics: Persimmon plc

Glass Lewis’ assessment of executive remuneration reflects a balance of quantitative and qualitative considerations, with CGLytics’ suite of tools underpinning the quantitative component. In the following discussion, we review the quantitative assessment with respect to Persimmon plc, using CGLytics’ analytical tools.

Equity Incentive Schemes: Examining the rationale behind shareholder rejection

Two historical examples of organizations that have had their stock option plans rejected by shareholders include Red Lion Hotels and HomeAway. How could they have reduced the likelihood of rejected plans? Read to find out

The approval for equity-based incentive plans, or amendments to current plans, is a critical part of many organizations strategies to acquire and retain premium talent. Opposition or even rejection by shareholders can derail these efforts.

In this article we look at two historical examples of organizations that have had their equity incentive plans rejected and explore the reasons behind and impact of shareholder opposition.

When Red Lion Hotels was punished for lack of clear strategy

In 2019, Red Lion Hotels Corporation’s (NYSE: RLH) shareholders delivered a blow to the company by voting overwhelmingly (70% opposed) against the proposed amendment to the 2015 stock incentive plan.

Shareholders were troubled by, what they perceived, as the board’s continued inability to fulfil its obligations and the absence of a clear strategy (Vindico Capital LLC – letter to the board). Flat performance of the stock over time and significant underperformance against the market and industry peers were particular points of concern for shareholders.

When HomeAway was sent packing

In 2015, HomeAway (NASDAQ: AWAY) had their amended equity incentive plan rejected. Investors felt equity awards continued to be granted despite diminishing returns for investors over time. While the Market Capitalization of HomeAway had remained relatively steady over two years, the rest of the index saw significant gains. Total Shareholder Return was perceived as minimal in this context and the equity awards were seen to be rewarding poor performance. Ultimately HomeAway was acquired shortly afterwards and incorporated into one of the largest travel industry players, Expedia.

Trends in the opposition

When shareholders are considering the impact of diluting their holdings, they require that any potential value lost by the equity incentive plan is offset by the value the business gains by meeting the qualifying KPIs. Whether this is Market Capitalization, Total Shareholder Return, EBITDA or free cashflow, there has to be a compelling strategic rationale for the award of equity. Further, the remuneration committee must ensure that the organization behaves is a prudent manner, even after the plan is agreed to.

Test your equity compensation plans with Glass Lewis’ Equity Compensation Model

Reduce the likelihood of shareholder rejection on your stock option plans and proposals with Glass Lewis’ new  Equity Compensation Model (ECM) application. Now available exclusively via CGLytics. Providing unprecedented transparency to the U.S. market in one powerful online application, both companies and investors can use the same 11 key criteria as the leading proxy advisor to assess equity incentive plans.

Click here to experience Glass Lewis’ new application.

Latest Industry News, Views & Information

The increasing trend of shareholder opposition to executive pay

Votes against executive remuneration are growing. In this article we look at this change in the European indices and the S&P500.

Shutterfly: A Glass Lewis Use Case

Glass Lewis takes a look at the recent proposed amendment to the Shutterfly equity compensation program and the response from shareholders.

Tailoring Executive Remuneration Analysis Using CGLytics: Persimmon plc

Glass Lewis’ assessment of executive remuneration reflects a balance of quantitative and qualitative considerations, with CGLytics’ suite of tools underpinning the quantitative component. In the following discussion, we review the quantitative assessment with respect to Persimmon plc, using CGLytics’ analytical tools.

Capri Holdings – A Glass Lewis Use Case into Executive Compensation Benchmarking

In this use case, Glass Lewis examine the “additional considerations” regarding the quantitative examination with respect to Capri Holdings, Inc. (formerly Michael Kors Holdings Ltd.) using CGLytics’ analytical tools.

Glass Lewis’ two-pronged approach to executive compensation analysis in the North American market is delineated between the quantitative analysis and a qualitative assessment. The quantitative portion, while anchored by the pay for performance grade, incorporates additional considerations to supplement the standardized pay for performance analysis.

CGLytics’ suite of tools is fast becoming an integral part of the quantitative analysis for the North American market. In July 2019, the Compensation Analysis section became a part of Glass Lewis’ Proxy Paper for S&P 1500 companies in the U.S. and Canada. The page illustrates total realized compensation of CEOs based on data provided by CGLytics. Covering the past three years, realized CEO pay is presented on both an absolute basis and relative to country and industry peer groups developed by Glass Lewis using CGLytics tools.

In the following discussion, we examine the aforementioned “additional considerations” regarding the quantitative examination with respect to Capri Holdings, Inc. (formerly Michael Kors Holdings Ltd.) using CGLytics’ analytical tools.

Review of Capri Holdings’ Compensation Program

On August 1, shareholders gave their appraisals of executive pay practices at Capri Holdings, casting votes in favor or against the compensation packages of its named executive officers. The company is one of the few in the broader markets where multiple named executive officers receive pay at the CEO level or higher. Michael Kors as chief creative officer (CCO) and honorary chair and John Idol as CEO have received largely equivalent pay packages for most if not all of Capri Holdings’ history as a publicly traded company.

Multiple CEO-level pay recipients at individual companies have drawn the ire of shareholders in the past and no doubt will continue to do so in the future. However, executives from the apparel industry who engaged with Glass Lewis note that the industry is distinct in that the parity between chief executive and chief creative officer pay is not uncommon, but CCO pay is rarely reported on the Summary Compensation Table as these officers are not typically considered executives. In Capri Holdings’ case, however, perhaps because of his additional title of honorary chair, Mr. Kors is thus a named executive officer whose pay is subject to scrutiny at the Company’s annual advisory say on pay vote.

Overview of the Pay For Performance Grade and the Compensation Analysis Page:

Despite its dual CEO pay level executives, Capri Holdings received a “C” grade under Glass Lewis’ pay for performance model in each year from fiscal years 2015 to 2018, indicating adequate alignment. But in fiscal 2019, the company received a “D” grade after a jump in equity compensation to Messrs. Kors and Idol pushed Capri Holdings’ three-year weighted average compensation levels up – a move unsupported by the company’s weighted average performance that dipped in this year’s analysis. The analysis concluded that the company paid moderately more than its peers but performed moderately worse compared to peers.

Unique situations such as Capri Holdings’ case demonstrate the benefits that additional quantitative  analyses have had in Glass Lewis’ approach to executive compensation. One might contend that the pay for performance grade penalized Capri Holdings for common industry pay practices of chief creative officer pay, boosting total named executive officer pay above peers that do not also list their chief creative officer as a top executive.

The CGLytics-powered Compensation Analysis page in Glass Lewis’ research provided additional perspective to help consider Capri Holdings’ executive pay situation. Its focus on CEO pay underscored concerns flagged by the pay for performance analysis. In the same year that the company granted $7.5 million in equity incentives to each of Messrs. Kors and Idol, Mr. Idol’s fiscal 2019 total realized pay increased by 210% from $22.2 million to $68.9 million. At the same time, the Compensation Analysis reported that the median CEO total realized pay among industry peers remained relatively stagnant, highlighting the stark difference in realized pay levels for the CEO position at Capri Holdings compared to peers. While many companies often cite retention concerns due to low realized or realizable pay as reasons for significant increases in equity grants, the analysis using CGLytics indicated this to not be the case, at least for realized pay to the CEO.

Additional Perspectives Through CGLytics:

Beyond the Compensation Analysis page, by focusing on CEO pay using the CGLytics’ broader suite of tools, Glass Lewis found evidence to suggest deeper concerns with pay-setting for the short-term incentive. While the company provided Mr. Idol with no LTIP award in 2018 and only $1 million in 2017, the company’s incentives focused on short-term performance made up for the deficiency. Using CGLytics we can observe the following short-term incentive payout comparison to the industry peer median for most of Capri Holdings’ history as a publicly traded company where 2018 represents the most recently completed fiscal year for the company:

In our view, excessive upside opportunities under a bonus plan may unduly incentivize short-term performance and may undermine a long-term focus on company performance among executives. In fact, Mr. Idol received his maximum payout opportunity under the short-term incentive every year since 2012.

Switching gears in 2019, the Company decided to grant Mr. Idol $7.5 million in long-term incentives. Indeed, the grant resuscitated the level of Mr. Idol’s outstanding compensation following the exercise of a significant number of stock options. Mr. Idol exercised options to acquire 906,076 shares in fiscal 2019 – a value of $58.3 million according to the company’s proxy statement. The following chart shows the change in Mr. Idol’s total outstanding awards with the 2018 data representing the company’s fiscal 2019 and showing the net effect of his exercise of options and increased levels of long-term incentive grants during that year:

The effects of the long-term grant on total CEO pay was quite pronounced as seen in the graph below:

Review of GL recommendation:

In the end, an 89% year-over-year jump in Mr. Idol pay placed it at the 85th percentile of CEO compensation compared to the company’s self-disclosed peer group. The pay decisions for fiscal 2019 degraded the alignment between pay and performance in our analysis. Additional analysis into in the quantum of pay for Mr. Idol through CGLytics compounded our concerns. That Mr. Kors’ pay presented similar issues as Mr. Idol’s was also considered.

A deeper dive beyond our initial pay for performance analysis into the CEO’s total direct compensation uncovered a history of over-focus on short-term performance. Capri Holdings’ short-term incentive payouts rose well above the industry median since 2013. Due to the equity grants made to Mr. Idol during the most recently completed fiscal year, his pay spiked 1.2 times the median industry peer level, according to CGLytics’ multiple of median analysis.

As a result of these concerns, and following a qualitative assessment of the pay program, Glass Lewis recommended against supporting Capri Holdings’ executive compensation proposal for the 2019 annual meeting.

Conclusion:

Overall, the additional quantitative analysis using CGLytics underscored the concerns initially highlighted by Glass Lewis’ pay for performance grade by illustrating issues with pay regardless of the impact of Mr. Kors’ compensation on total NEO pay.

Access Glass Lewis’ Say on Pay analysis – Available through CGLytics

Glass Lewis uses CGLytics as it’s global compensation data provider. For the 2020 proxy season our data will provide the basis of Glass Lewis’ Say on Pay recommendations.

 

Learn More

Latest Industry News, Views & Information

The increasing trend of shareholder opposition to executive pay

Votes against executive remuneration are growing. In this article we look at this change in the European indices and the S&P500.

Shutterfly: A Glass Lewis Use Case

Glass Lewis takes a look at the recent proposed amendment to the Shutterfly equity compensation program and the response from shareholders.

Tailoring Executive Remuneration Analysis Using CGLytics: Persimmon plc

Glass Lewis’ assessment of executive remuneration reflects a balance of quantitative and qualitative considerations, with CGLytics’ suite of tools underpinning the quantitative component. In the following discussion, we review the quantitative assessment with respect to Persimmon plc, using CGLytics’ analytical tools.

Proxy Season Lookback: CGG marks first binding ‘non’ on pay in France – A guest blog by Glass Lewis

The 2019 season marked the second opportunity for French shareholders’ to cast retrospective binding votes on executive compensation. And for the first time, shareholder votes prevented the payment of a bonus award, as well as the implementation of a new pay policy.

A guest blog by

The 2019 season marked the second opportunity for French shareholders’ to cast retrospective binding votes on executive compensation. And for the first time, shareholder votes prevented the payment of a bonus award, as well as the implementation of a new pay policy.

In many markets a say-on-pay vote is offered, but under Sapin II legislation, which came fully into effect in 2018, French shareholders get several “says” on remuneration arrangements. The variable payments due to each executive are subject to a series of “ex-post” binding votes (one for each executive) and there is an annual “ex-ante” binding vote on the intended remuneration policy for the current year. In addition, shareholders also get forward-looking advisory votes on severance arrangements.

It’s the binding “ex-post” vote that has drawn the most attention — in particular, the potential implications of how a rejection could affect the organisation, with several possible scenarios. How would an executive react to such a public rebuke from shareholders? To losing the bonus they thought they had earned? Would the board take emergency measures and what could these be, or would continued service prove untenable, prompting an immediate resignation? In 2018 there were several backward-looking compensation proposals that came close to providing answers, with Teleperformance, Vinci, Renault, Technicolor and Atos coming close to failing. But it wasn’t until this year’s shareholder meeting of SBF120 listed CGG, specializing in geophysical services, that shareholders got to see the implications of voting down a CEO’s pay. Well, sort-of.

After changing CEO early in the fiscal year, CGG had a number of proposals covering executive pay on the agenda. Shareholders received two binding, backward-looking votes, covering the FY2018 variable remuneration due to both the current and former CEOs, as well as one binding, forward looking vote, covering the proposed FY2019 remuneration policy of the current CEO, and one advisory forward looking vote on post-termination severance arrangements.

Shareholders voiced their dissent across the board. Support for executive pay proposals ranged from a high of just 56.65% to a low of 38.63%, with two voted down. These were the ex-post, binding vote on the remuneration due to the former CEO Jean-Georges Malcor for fiscal year 2018, and the ex-ante, binding vote on the 2019 remuneration policy for the current CEO, Sophie Zurquiyah.

Besides being historic, the ex-post rejection was somewhat surprising. Mr. Malcor’s variable package contained no surprises and only represented a small fraction of his total quantum for the year. Payment of a €75,000 extraordinary award in respect of a successful debt restructuring may have been viewed as somewhat questionable, especially after CGG decided to pursue a new strategy after his departure in order to recover from a record of poor financial performance. However, the payment was relatively modest, particularly in comparison to the total of €1,626,673, that Mr. Malcor received in respect of fixed salary and a non-competition agreement (the ex-post votes under Sapin II do not cover fixed remuneration). Also surprising was that the award was not unexpected, having been clearly disclosed as part of Mr. Malcor’s forward-looking binding remuneration proposal, which received 96.90% support at the 2018 meeting.

With only 53.52% support, the binding proposal covering variable remuneration due to the current CEO, Sophie Zurquiyah, narrowly avoided the same fate. The binding, forward-looking proposal covering the remuneration policy intended to apply for the current fiscal year was not so fortunate, garnering just 44.3% support. The consequences of this vote are more transparent, and nowhere near as potentially far-reaching, as that of the “ex-post” vote. Instead of the policy terms that had been proposed, Ms. Zurquiyah’s remuneration will continue to be determined by the company’s existing policy, previously approved by shareholders at the 2018 AGM. That may ultimately suit shareholders – while the company had not proposed any material changes to the existing policy, specific details of the 2019 iteration were not fully disclosed.

The company has issued a press release acknowledging the vote results and stating that the board “will consider the adjustments to be made to the Chief Executive Officer’s remuneration policy in order to obtain the shareholders’ approval at the next General Meeting.” It’s unclear if that consideration will include an engagement programme to garner feedback from investors – or what will happen if and when French shareholders reject the variable pay due to a current, rather than former, CEO.

This article was originally published on the Glass Lewis website, 23/07/2019. You can read the article here: https://www.glasslewis.com/proxy-season-lookback-cgg-marks-first-binding-non-on-pay-in-france/ 

About the Author

1030648

Iris Bucelli
Senior Research Analyst at Glass Lewis & Co.,

Irene joined Glass Lewis as Corporate Governance Analyst for Continental Europe in 2017. She specialises in executive compensation analysis of French blue-chip and mid-cap companies. After completing a Masters Degree at the University of Bologna, she worked on international projects in Italy, France and Spain, before landing in Ireland.

Access Glass Lewis’ Say on Pay analysis – Available through CGLytics

Glass Lewis uses CGLytics as it’s global compensation data provider. For the 2020 proxy season our data will provide the basis of Glass Lewis’ Say on Pay recommendations.

 

Learn More

Latest Industry News, Views & Information

The increasing trend of shareholder opposition to executive pay

Votes against executive remuneration are growing. In this article we look at this change in the European indices and the S&P500.

Shutterfly: A Glass Lewis Use Case

Glass Lewis takes a look at the recent proposed amendment to the Shutterfly equity compensation program and the response from shareholders.

Tailoring Executive Remuneration Analysis Using CGLytics: Persimmon plc

Glass Lewis’ assessment of executive remuneration reflects a balance of quantitative and qualitative considerations, with CGLytics’ suite of tools underpinning the quantitative component. In the following discussion, we review the quantitative assessment with respect to Persimmon plc, using CGLytics’ analytical tools.

Correcting Founder’s Syndrome: Executive Compensation Practices at Ralph Lauren

Ahead of the Ralph Lauren AGM, CGLytics looks at how CEO pay has changed since the founder’s exit, and how the nominations change the board composition.

Ralph Lauren Corporation, a global leader of premium lifestyle products, is scheduled to hold its 2019 Annual General Meeting of Shareholders (AGM) on August 1, 2019. Shareholders attending the AGM will vote on the following resolutions:

  • The election of 4 directors to serve until the 2020 Annual General Meeting of Shareholders;
  • The ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending March 28, 2020;
  • The approval, on an advisory basis, the compensation of the Company’s named executive officers and the Company’s compensation philosophy, policies, and practices;
  • The adoption of the Company’s 2019 Long-Term Stock Incentive Plan.

 

Election of Directors:

Ralph Lauren has two classes of directors, Class A and Class B. At the upcoming AGM, four Class A directors will be proposed for election: Frank A. Bennack, Joel L. Fleishman, Michael A. George, and Hubert Joly. We note that in 2018, Ralph Lauren increased the size of its Board with the appointment of three new directors, namely Michael A. George, Angela Ahrendts, and Linda Findley Kozlowski, ostensibly to expand the Board’s “diversity of skills and experiences”. These three directors bring to the Board Leadership, Executive, and Industry/Sector expertise, with Michael A. George and Linda Findley Kozlowski being active CEOs in two retail companies and Angela Ahrendts being a former executive of Apple, Burberry Group plc and Kate Spade & Company. In terms of skills, the three individuals bring about Marketing, Sales and Operations knowledge. Nevertheless, the Board still appears to lack Technology and Financial expertise.

However, in addition to the diversity of skills that the addition of the new directors has brought to the board, the company also now maintains a gender diversity level of 50%, well above the market standard for the United States.

Source: CGLytics Data and Analytics

Executive Compensation:

The third resolution in the agenda is a shareholders’ advisory vote to approve the Company’s executive compensation.

After the Founder, Ralph Lauren, stepped down from his position as CEO, Ralph Lauren has gone through two CEO changes, with Stefan Larsson serving from November 2015 to May 2017, and Patrice Louvet serving since July 2017. As can be seen from the absolute comparison chart generated by CGLytics’ Pay for Performance module, there appears to be a misalignment between CEO compensation and one-year total shareholder return between 2008 and 2015. However, it appears that this misalignment has reduced since Mr. Lauren left the position of CEO. Furthermore, we also see that the total realized compensation for the CEO thereafter has been reduced significantly.

Source: CGLytics' P4P Modeler

CGLytics’ data and analytics are trusted and used worldwide by Glass Lewis, the leading independent proxy advisor, as a basis for their research on companies

CEO Compensation Package Breakdown

Historically, the CEO’s compensation package has primarily focused on his STI opportunity (between 2009 and 2012). However, since then, the CEOs compensation package breakdown has shifted towards long-terms incentives, which now form a greater component of the CEO’s compensation package.

Additionally, in 2017 the performance measures of LTI grants shifted from 3-year Cumulative Operating Margin and Operating Margin to 3-year Cumulative Return on Invested Capital (ROIC) and 3-year Relative Total Shareholder Return (TSR) in 2018. Ralph Lauren also added Global digital revenue as a new measure for STI grants, a modifying KPI that could result in an “adjustment of bonuses upwards or downwards by 10%.”

Source: CGLytics' P4P Modeler

Relative Positioning

In comparison to Ralph Lauren’s own disclosed peer goup, the Company’s CEO pay appears now to be line with its peers. Additionally, when reviewing the company’s relative positioning among its peers, there also appears to be a pay for performance alignment between Ralph Lauren’s 3-year TSR and compensation paid to its CEO.

RalphLauren4
Source: CGLytics' P4P Modeler

Ralph Lauren also proposes adopting a 2019 Long-Term Stock Incentive Plan, under which the Company awards equity compensation to executive officers, to replace the current Ralph Lauren Corporation 2010 Amended and Restated Long-Term Stock Incentive Plan. Under the new plan, LTI awards will be determined based on 3-year Cumulative Return on Invested Capital (ROIC) and 3-year Relative Total Shareholder Return (TSR).

Overall, we find that although the company has seen shifts in executive leadership over the past few years after Mr. Lauren left the reigns of the company to his successor, we also find that the company’s executive compensation programs have fallen more in line with market norms, correcting a former pay for performance misalignment that extended under Mr. Lauren’s leadership.

To learn how companies can become proactive and support modern governance decision-making, with access to the same insights as activist investors and proxy advisors, click here.

Sources

CGLYTICS DATA AND ANALYTICS   RALPH LAUREN 2019 PROXY STATEMENT

Latest Industry News, Views & Information

The increasing trend of shareholder opposition to executive pay

Votes against executive remuneration are growing. In this article we look at this change in the European indices and the S&P500.

Shutterfly: A Glass Lewis Use Case

Glass Lewis takes a look at the recent proposed amendment to the Shutterfly equity compensation program and the response from shareholders.

Tailoring Executive Remuneration Analysis Using CGLytics: Persimmon plc

Glass Lewis’ assessment of executive remuneration reflects a balance of quantitative and qualitative considerations, with CGLytics’ suite of tools underpinning the quantitative component. In the following discussion, we review the quantitative assessment with respect to Persimmon plc, using CGLytics’ analytical tools.

2019 CEO Pay Review: The Top 50 Highest Paid CEOs

As proxy season progresses and companies file their annual reports, CGLytics surveys the world’s highest paid CEOs (so far) and looks at how executive compensation has grown since the last year.

CEO Pay continued to dominate the AGM season in 2019. As we take a break over the summer, it’s worth reviewing the top 50 highest paid CEOs and seeing how this has changed from 2018.

We also take a look at how the performance of these companies has increased to understand how executives are rewarded for performance.

Key CEO pay take aways from the first half of 2019 :

  • The top 50 total granted compensation has increased by over 300% from 2018 to 2019 ($4.49bn compared to $1.12bn).
  • Although over 50% of the $4.4bn is attributable to one individual’s granted compensation (Elon Musk, Tesla: $2.28bn).
  • Even discounting this outlier, total granted executive compensation increased by 97%.
  • Meanwhile the average growth in market capitalisation was around 3% from 2018.
  • And 1 year Total Shareholder Return (TSR) actually shrank by 1%.

 

Given these significant increases in total granted compensation compared to the value being delivered to shareholders, it’s easy to see why CEO pay and compensation continues to dominate AGM discussions.

Trending Top 50 CEOs

Ranking

CEO

Company

Total Granted
Compensation

Total Realised Pay

TSR in %

TSR 1YR growth in
%point

1

Musk, Elon

Tesla, Inc.

$2,284,044,884
(
54575310%)

$56,380 (513%)

57%

515%

2

Smith, Patrick

Axon Enterprise, Inc.

$246,026,710
(
56433%)

$25,488,720
(
5472%)

565%

592%

3

Zaslav, David

Discovery Communications, Inc.

$129,499,005
(
5207%)

$33,498,259
(
662%)

511%

543%

4

Glancey, Stephen

C&C Group plc

$119,819,023
(
510%)

$1,643,004
(
536%)

50%

62%

5

Hodler, Bernhard

Julius Baer Group Ltd.

$78,813,367
(
54694%)

$2,979,804
(
581%)

640%

639%

6

Levine, Jay

OneMain Holdings, Inc.

$71,532,583
(
516913%)

$71,532,583
(
516913%)

67%

62%

7

Schwarzman, Stephen

The Blackstone Group L.P.

$69,147,028
(
645%)

$69,147,028
(
645%)

50%

51%

8

Legere, John

T-Mobile US, Inc.

$66,538,206
(
5270%)

$42,071,611
(
5243%)

50%

57%

9

Iger, Robert

The Walt Disney Company

$65,645,214
(
581%)

$66,065,073
(
68%)

54%

56%

10

Steele, Gary

Proofpoint, Inc.

$64,730,296
(
5892%)

$54,931,367
(
528%)

66%

510%

11

Charlès, Bernard

Dassault Systèmes SE

$51,098,970
(
577%)

$65,983,199
(
578%)

518%

517%

12

Alber, Laura

Williams-Sonoma, Inc.

$50,758,332
(
5252%)

$28,830,401
(
5224%)

51%

63%

13

Heppelmann, James

PTC Inc.

$49,969,163
(
5403%)

$17,041,464
(
5107%)

536%

546%

14

Freda, Fabrizio

The Estée Lauder Companies Inc.

$48,753,819
(
50%)

$9,387,109
(
683%)

53%

56%

15

Buckley, Henry

Uni-Select Inc.

$47,774,090
(
52687%)

$47,012,426
(
53416%)

630%

634%

16

Handler, Richard

Jefferies Financial Group Inc.

$44,674,213
(
5105%)

$5,951,709
(
5339%)

633%

638%

17

Kilroy, John

Kilroy Realty Corporation

$43,624,774
(
5282%)

$18,204,958
(
622%)

614%

610%

18

Bird, Lewis

At Home Group Inc.

$43,089,790
(
52477%)

$1,614,791
(
63%)

639%

632%

19

Lebda, Douglas

LendingTree, Inc.

$42,318,238
(
629%)

$164,584,011
(
53682%)

636%

628%

20

MacMillan, Stephen

Hologic, Inc.

$42,040,142
(
5275%)

$12,231,622
(
656%)

64%

56%

21

Hogan, Joseph

Align Technology, Inc.

$41,758,338
(
5256%)

$69,763,660
(
5504%)

66%

61%

22

Schulman, Daniel

PayPal Holdings, Inc.

$37,764,588
(
596%)

$41,295,115
(
5328%)

514%

517%

23

Hastings, Reed

Netflix, Inc.

$36,080,417
(
548%)

$4,064,854
(
698%)

539%

547%

24

Roberts, Brian

Comcast Corporation

$35,026,207
(
58%)

$47,400,117
(
640%)

613%

613%

25

Jellison, Brian

Roper Technologies, Inc.

$34,931,318
(
520%)

$142,847,568
(
5103%)

54%

59%

26

Wenig, Devin

eBay Inc.

$34,842,832
(
597%)

$19,946,164
(
566%)

626%

628%

27

Thiry, Kent

DaVita Inc.

$32,017,501
(
5109%)

$13,983,054
(
610%)

629%

632%

28

Kotick, Robert

Activision Blizzard, Inc.

$30,841,004
(
57%)

$4,307,586
(
697%)

626%

622%

29

Wichmann, David

UnitedHealth Group Incorporated

$30,824,112
(
577%)

$22,558,157
(
673%)

515%

518%

30

Dimon, James

JPMorgan Chase & Co.

$30,033,745
(
56%)

$18,136,934
(
687%)

67%

68%

31

Lutnick, Howard

BGC Partners, Inc.

$29,694,152
(
589%)

$17,791,850
(
511%)

643%

659%

32

Stephenson, Randall

AT&T Inc.

$29,118,118
(
51%)

$21,606,548
(
614%)

622%

69%

33

Narayen, Shantanu

Adobe Systems Incorporated

$28,397,528
(
529%)

$67,297,455
(
555%)

529%

534%

 

Benioff, Marc

salesforce.com, inc.

$28,391,846
(
5510%)

$44,183,075
(
662%)

534%

549%

35

Moghadam, Hamid

Prologis, Inc.

$28,201,397
(
546%)

$35,887,540
(
56%)

66%

516%

36

Gorman, James

Morgan Stanley

$28,168,639
(
515%)

$19,299,856
(
652%)

623%

624%

37

Florance, Andrew

CoStar Group, Inc.

$27,555,954
(
5159%)

$18,644,383
(
517%)

514%

520%

38

Greenberg, Robert

Skechers U.S.A., Inc.

$27,361,406
(
5252%)

$11,157,656
(
515%)

640%

637%

39

Umpleby, D.

Caterpillar Inc.

$27,289,513
(
594%)

$14,840,544
(
5171%)

618%

616%

40

Fink, Laurence

BlackRock, Inc.

$26,543,344
(
64%)

$51,471,260
(
561%)

622%

621%

41

Schleifer, Leonard

Regeneron Pharmaceuticals, Inc.

$26,520,555
(
50%)

$117,840,017
(
524%)

61%

56%

42

Chenault, Kenneth

American Express Company

$24,208,661
(
530%)

$54,431,474
(
642%)

63%

61%

43

Holmes, Stephen

Wyndham Worldwide Corporation

$21,479,166
(
542%)

$50,161,004
(
553%)

629%

669%

44

Johnson, R.

HCA Healthcare, Inc.

$21,419,906
(
524%)

$109,050,692
(
51407%)

543%

544%

45

Banga, Ajaypal

MasterCard Incorporated

$20,379,353
(
59%)

$60,704,447
(
5145%)

525%

528%

46

Brown, Gregory

Motorola Solutions, Inc.

$20,348,558
(
533%)

$69,555,180
(
5137%)

530%

535%

47

Minogue, Michael

ABIOMED, Inc.

$19,243,230
(
587%)

$123,043,867
(
5907%)

573%

585%

48

Casper, Marc

Thermo Fisher Scientific Inc.

$18,607,103
(
616%)

$85,476,755
(
5161%)

518%

524%

49

Meyer, James

Sirius XM Holdings Inc.

$17,633,953
(
582%)

$50,452,233
(
5331%)

57%

56%

50

Fairbank, Richard

Capital One Financial Corporation

$17,333,796
(
57%)

$108,527,637
(
557%)

623%

622%

[1] Compensation in USD – exchange rates based on single point of time, end of tax year 2018.

[2] Excludes executives appointed since 2017 season.

Latest Industry News, Views & Information

FirstGroup Take Another Ride on the Activist Train

Over the past nine months, FirstGroup plc has been the target of an activist campaign from New York-based hedge fund, Coast Capital. One of the main critiques by the activist investor was regarding the governance structure, specifically the composition of the board. Utilizing CGLytics’ analytics and tools in its platform, we show how FirstGroup could have spotted governance red flags to possibly avoid this situation.

A glance into Slack’s CEO pay

Slack Technologies recently started trading on the NYSE. In the company’s S-1 statement, the company does not disclose precisely what the pay structure will be for the coming year. Utilizing CGLytics’ Peer Composer tool, a hypothetical peer group from a data universe coverage of over 5,500 global companies was constructed for Slack, to determine the possible pay structure.

CSR Limited: Strike One on Remuneration Report

At the CSR Limited AGM in June 2019, the remuneration report received 34% of votes cast against which constitutes a first strike for the purposes of the corporations ACT 2001. CGLytics looks at the alignment of pay against performance and some of the key drivers behind the investor response.

FirstGroup Take Another Ride on the Activist Train

Over the past nine months, FirstGroup plc has been the target of an activist campaign from New York-based hedge fund, Coast Capital. One of the main critiques by the activist investor was regarding the governance structure, specifically the composition of the board. Utilizing CGLytics’ analytics and tools in its platform, we show how FirstGroup could have spotted governance red flags to possibly avoid this situation.

As the dust settles from FirstGroup plc’s latest engagement from activist investor Coast Capital, CGlytics looks at the timeline and the reasons why the company was a target of shareholder activism. This was not FirstGroup’s first experience as a target of activism. In 2013, Sandell, which owned a little over three percent of FirstGroup, wrote to the directors urging them to spin off and list the U.S. business unit separately on the stock market. Sandell, at the time said the break-up would enable the company to fund a much-needed investment program in its British bus business. FirstGroup fended off the proposal, with the notion that it contained structural flaws and inaccuracies.

Where this activist ride began

Over the past nine months, FirstGroup has been the target of activism from New York-based hedge fund, Coast Capital. The back and forth between the issuer and the investor date back to November 2018 when the Non-Executive Chairman of FirstGroup’s board, Dr. Wolfhart Hauser, responded in a letter written to the latter. The letter from Coast Capital included demands for management change and included criticism over the company’s failure to pay a dividend.

On May 17, 2019, FirstGroup received a letter from Coast Capital requesting an EGM to remove six of the current directors, increase the size of the board by one seat, and elect Coast Capital’s seven nominees. Coast Capital criticized the board saying that its directors lacked sector and industry expertise with reference to the CEO, Matthew Gregory, and Chairman of the Board, Hauser. Again, the activist investor pushed for a separation of the US and UK businesses, having declared FirstGroup’s strategy – and particularly its UK rail investment – as “extraordinarily destructive of capital”.

In June 2019, FirstGroup seemed to be taking heed to the investor pressure and announced that it will be selling off its bus division and possibly withdrawing from UK rail operations. The company also announced that it will focus on the US, although stating that it plans to sell off the famous Greyhound coach line.

The board’s expertise

One of the main critiques by Coast Capital was regarding the governance structure, specifically the composition of the board. Utilizing the Board Expertise functionality in CGlytics’ platform, insights are revealed as to the current board’s skills and expertise makeup. In particular, the Skills Matrix functionality in CGLytics’ solution aids companies to identify any skills gaps within their current board.

For FirstGroup, of the 11 directors currently sitting on the board, the graph shows that the strongest levels of expertise present on the board are International, Leadership and Executive. According to the Skills Matrix, it appears that the company lacks directors with expertise in the areas of Finance and Technology.

FirstGroup plc's Board Expertise and Skills Matrix
FirstGroup's Board Expertise and Skills Matrix
Source: CGLytics Executive Compensation Models

Pay for Performance

According to the pay policy of FirstGroup, the company aims to align its pay with performance and also with best corporate governance global practice. The company currently uses three performance criteria in the determination of its long-term incentive plans:

– Total Shareholder Return (TSR),
– Earnings Per Share (EPS), and
– ROCE.

Of which, the first two are equally weighted at 40% and the latter accounts for the remaining 20%.  The CGlytics Absolute Positioning tool sheds light on the relationship between the EPS performance component and the CEO’s realized compensation from 2013 to 2018.

CGLytics’ data and analytics are trusted and used worldwide by Glass Lewis, the leading independent proxy advisor, as a basis for their research on companies

 

As indicated in the graph below, there exists significant volatility in the movements of EPS and CEO pay. From 2016 to 2018, although both indicators fell, there seems to suggest that EPS had a much steeper fall compared to that of the CEO pay.

Specifically, while CEO pay reduced by 20% over the period, EPS fell by 43%. The CGlytics Relative Positioning Pay for Performance Evaluation tool compares FirstGroup’s CEO Realized Compensation with that of the company’s own peer group disclosed in the 2019 annual report against the peer group’s one year TSR.

The Pay for Performance evaluation reveals that the CEO’s Total Realized Compensation appears aligned with its performance indicator relative to its peers. The company’s Total Realized Pay ranks at lower decile at 18th percentile while TSR ranks in the 32nd percentile. It is also worth noting that the low pay stems from the fact that the company failed to meet its performance measures, and so the LTI part of the Total Compensation vested at only 12.5%.

Source: CGLytics Executive Compensation Models

Before, During and After the EGM

With Coast Capital’s request for an EGM, FirstGroup published a notice for the shareholders’ meeting to vote on the removal of six directors of the current board (including the Chairman, CEO and four other independent Directors). Additionally, appoint seven directors who are nominees of Coast Capital. Expectedly, in the EGM notice of meeting, the board recommended to vote against all the resolutions, believing that they the right strategy to take the company forward.

They added that Coast Capital’s director nominees do not have current relevant experience and also put forward plans that will leave the group with higher debts.

Interestingly, the movement and arguments garnered support from other leading shareholders.

Columbia Threadneedle, with a 10% stake, said it will join in voting against the reappointment of Wolfhart Hauser, the FirstGroup chairman since 2015. Schroders, with a 9% holding, was also seen to have taken sides with Coast Capital.

In a rather unexpected turn of events, one of the director nominees by Coast Capital, David Martin, missed the nomination affirmation deadline and was withdrawn ahead of the general meeting. Speculations suggested that David Martin, who is the former boss of Arriva, a transport company rival and one of the fund’s key nominees, decided not to run for a board seat because he had other projects under consideration.

At the general meeting which was held on June 25, 2019, the shareholders (on average) voted more than 20% in favor of the resolutions. The resolution to remove the Chairman Wolfhalt Hauser was supported by 29.33%, the resolution to remove the CEO was also approved by 25.15%. The resolutions to remove independent directors Imelda Mary, Stephen William Lawrence Gunning, James Frank Winestock and Martha Cecilia Poulter received votes of 31%, 25%, 46% and 25% respectively.

Not one of the directors put forward by the activist investor received the requisite votes to be appointed to the board.

Aftermath: Searching for a New Chairman

Despite receiving enough support to stay on the board, Wolfhart Hauser announced that he will not be seeking re-election to the board during the AGM, which is expected to come off on July 25, 2019. According to the company, senior independent director David Robbie will take on the role of chairman on an interim basis with effect from July 25, overseeing the search for a new chair.

To learn how companies can become proactive and support modern governance decision-making, with access to the same insights as activist investors and proxy advisors, click here.

Latest Industry News, Views & Information

The increasing trend of shareholder opposition to executive pay

Votes against executive remuneration are growing. In this article we look at this change in the European indices and the S&P500.

Shutterfly: A Glass Lewis Use Case

Glass Lewis takes a look at the recent proposed amendment to the Shutterfly equity compensation program and the response from shareholders.

Tailoring Executive Remuneration Analysis Using CGLytics: Persimmon plc

Glass Lewis’ assessment of executive remuneration reflects a balance of quantitative and qualitative considerations, with CGLytics’ suite of tools underpinning the quantitative component. In the following discussion, we review the quantitative assessment with respect to Persimmon plc, using CGLytics’ analytical tools.

A glance into Slack’s CEO pay

Slack Technologies recently started trading on the NYSE. In the company’s S-1 statement, the company does not disclose precisely what the pay structure will be for the coming year. Utilizing CGLytics’ Peer Composer tool, a hypothetical peer group from a data universe coverage of over 5,500 global companies was constructed for Slack, to determine the possible pay structure.

Slack Technologies recently started trading on the NYSE on June 20th, 2019. In the company’s S-1 statement, the company does not disclose precisely what the pay structure will be for the coming year, as this responsibility will be held by the incoming board of directors. However, it is expected that all such information will be disclosed at the company’s first AGM.

In Slack’s S-1 report, they make it clear that they intend to prioritize pay for performance as stated:

“Although we do not have a formal policy with respect to the grant of equity incentive awards to our executive officers, we believe that equity grants provide our executives with a strong link to our long-term performance, create an ownership culture, and help to align the interests of our executives and our stockholders”.

Slack’s S-1 does not disclose their own selected peer group for compensation. Utilizing CGLytics’ Peer Composer tool, a hypothetical peer group from a data universe coverage of over 5,500 global companies was constructed for Slack.

As the company is regarded as an enterprise technology company, parameters were defined to select comparable companies’ as reference points, namely 8×8 Inc. Using this approach, the following peer group of 20 companies was constructed:

Selected Peer Group for Slack:

Pegasus Systems, Inc. Nutanix, Inc.
Brightcove, inc. Blackline, Inc.
8×8, Inc. PROS Holdings, Inc.
Agilysys, Inc. Benefitfocus, Inc.
LivePerson, Inc. Instructure, Inc.
Synchronos Technologies, Inc. MobileIron, Inc.
Yext, Inc. Telenav, Inc
Cloudera, Inc. Varonis Systems, Inc.
FourScout Technologies, Inc. Q2 Holdings, Inc.
FireEye, Inc. Model N, Inc
Box, Inc. Carbon Black, Inc.
FireEye, Inc. Model N, Inc.
A10 Networks, Inc.

Source: CGLytics’ Peer Composer

Although Slack’s product can be regarded as novel, 8×8 is regarded as a suitable peer due to both companies specializing in providing communication solutions to corporates.

CGLytics’ data and analytics are trusted and used worldwide by Glass Lewis, the leading independent proxy advisor, as a basis for their research on companies.

 

As displayed in the chart below, this hypothetical peer group was used to gain insights into the average CEO remuneration breakdown, benchmarked against key performance indicator such as TSR, EBITDA and free cash flow.

Source: CGLytics Data and Analytics

The groups free cash flow and EBITDA appear somewhat of a divergent relationship where as TSR has remained relatively constant. The stacked bar chart above breaks down the average CEO group remuneration for each year and identifies LTI as the biggest contributor to CEO pay. Moreover, as the above bar chart illustrates, there exists in total seven components of pay which Slack may consider taking into consideration.

The components are:

– Base Salary; generally cash compensation levels for executives will increase after the IPO in somewhat of a “re-balancing act” to account for the equity offered up in the IPO. This is particularly true for venture backed start-ups where the majority of cash at hand will be spent on the operations of the business. Slack listed their 2018 fiscal salary compensation for their CEO as USD 356,952, comparatively, the average base salary for the peer group was USD 437,130.

– STIs; short-term incentives are typically benchmarked using operationally based performance measures and are subject to annual change. The compensation committee will need to take into consideration the specific company strategy as well as market conditions when determining what these will be.

– LTIs; these are most commonly equity-based incentives which take the form of stock options, restricted shares/RSUs and performance share plans. Both before and following an IPO, most companies rely on stock options as a means to incentivize the executives to drive the company share price above the exercise price. After a few years when companies have established themselves in the marketplace they tend to introduce a cyclical executive LTI plan. Slack has already detailed a “2019 Stock Option and Incentive Plan” which will allow the company the authority to grant equity to their executives.

Since Slack commenced trading, its share price has failed to gain momentum. It remains to be seen precisely how Slack’s pay structure for its executives will evolve post-IPO, and if future changes to the company’s executive incentive plan will push towards share-price based KPIs in order to swing the company’s low momentum out of its current doldrums.

CGLytics offers the broadest, up to date global data set and powerful benchmarking tools to conduct comprehensive analysis for executive compensation decisions and risk oversight. CGLytics is Glass Lewis’ source for global compensation data and analytics. These analytics power Glass Lewis’ voting recommendations in both their proxy papers and their custom policy engine service. To find out more click here.

Sources:

CGLYTICS DATA AND ANALYTICS   SLACK TECHNOLOGIES S-1  

Latest Industry News, Views & Information

The increasing trend of shareholder opposition to executive pay

Votes against executive remuneration are growing. In this article we look at this change in the European indices and the S&P500.

Shutterfly: A Glass Lewis Use Case

Glass Lewis takes a look at the recent proposed amendment to the Shutterfly equity compensation program and the response from shareholders.

Tailoring Executive Remuneration Analysis Using CGLytics: Persimmon plc

Glass Lewis’ assessment of executive remuneration reflects a balance of quantitative and qualitative considerations, with CGLytics’ suite of tools underpinning the quantitative component. In the following discussion, we review the quantitative assessment with respect to Persimmon plc, using CGLytics’ analytical tools.