Dialogue

The latest reporting, opinion and research on executive compensation. We don’t necessarily agree with it all, but we provide it here for consideration.

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May 9, 2016

Quick Picks

Pressure to Close the Pay Gap | The New York Times (subscription required) | May 11, 2016

The newly mandated disclosure of the ratio of CEO to median employee pay may be of greater interest to investors than previously anticipated. A recent study shows that companies with larger pay gaps between the CEO and the average employee tend to be less profitable over time than those with narrower pay gaps. This, coupled with increased attention from institutional investors on executive pay policies, may bring the pay ratio under greater scrutiny for many investors. Read more

Executive Hardship: Meeting Ownership Guidelines in a Volatile Market | Equilar | May 13, 2016

According to a recent Equilar report on executive stock ownership guidelines, nearly seven in eight Fortune 100 companies have a restriction on hedging, and nearly two-thirds have holding requirements. In addition to these, other practices, such as non-compliance penalties and compliance incentives, help executives meet ownership goals. Hardship provisions, on the other hand, provide allowances or exemptions from ownership guidelines in exceptional circumstances. In a volatile market, it may be prudent for companies to consider implementing such a provision. Read more

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