HomeWebcastPay Ratio, Proxy Disclosure and Say on Pay: Looking Back and What’s Ahead
Online CPE Pay Ratio CLE

Pay Ratio, Proxy Disclosure and Say on Pay: Looking Back and What’s Ahead

Live Webcast Date: Tuesday, September 10, 2019 from 12:00 pm to 2:00 pm (ET)
Corporate Law (CLE)Executive Compensation CLE & CPERecording

Online CPE Pay Ratio

Join us for this Knowledge Group Online CPE Pay Ratio Webinar. The pay ratio, proxy disclosure and say on pay are all intended to empower shareholders and give them the resources to ensure that the level and structure of executive pay are aligned with shareholder interests.  Our panel of key thought leaders and practitioners will address several key questions about these “shareholder control” devices:  Are they needed?  Do they work as Congress intended? How can they be improved?

Discussion topics will include:

  • How should shareholders use the pay ratio data?
  • Does the CD&A need a required graphic disclosure of pay vs performance?
  • What pay factors affect Say on Pay approval levels?
  • Are asset managers reluctant to vote “no” for fear of losing corporate business?

Agenda

Stephen F. O'Byrne, President
Shareholder Value Advisors Inc.
  1. Average employee pay can provide great insight on the alignment of employee pay with management pay and shareholder value but the required analysis goes far beyond the pay ratio.
  2. Proxy disclosure can be dramatically improved by the addition of a single graph.
    1. The graph is a scatterplot of relative pay against relative performance showing the regression trendline and reporting the slope (“pay leverage”), the correlation (“pay alignment”) and the intercept (“the pay premium at industry average performance”).
    2. Unfortunately, few companies are willing to provide the graph and institutional investors don’t ask for it.
  3. Say on Pay voting can be used to assess the governance efforts of institutional investors including the giant passive investors (BlackRock, Vanguard and State Street).
    1. Active investors can use their excess return to demonstrate the value of their stock selection and oversight.
    2. Passive investors can’t use returns to demonstrate the value of their oversight, but they (and rating services like Morningstar) can use their proxy voting to demonstrate the value of their oversight.
      • We’ll show a measure of Say on Pay voting quality that measures whether an investor’s SOP voting is informed by objective measures of pay equity, fair to management and fair to shareholders.

Ron Rosenthal, Lead Consultant
Meridian Compensation Partners, LLC
  • 2019 Say on Pay Results/Trends
  • CEO pay ratio related shareholder proposals and proposed legislation
  • Large investors engagement priorities 
  • ISS Policy Updates
  • Regulatory Update

Patrick Haggerty, Partner
Pay Governance LLC
  • CEO Pay Ratio Background
  • Year-over-year ratios by industry and company size
  • What variables affect the ratio
  • How should Compensation Committees evaluate their ratios

Michael J. Kenney, Principal
FW Cook
  • Evolution of the CD&A (SEC Compliance -> Say-on-Pay Support Document -> Shareholder Communication Document)
  • Use of Realizable Pay to Further Investor Understanding
  • Expanded disclosure of director compensation due to expanded scrutiny
    • Benchmarking
    • Limits on compensation
  • Other Emerging Topics

Preview Podcast

Please click the podcast below to hear the speakers discuss the key topics for this webcast.

Online CPE Pay Ratio

Stephen F. O'Byrne, President
Shareholder Value Advisors Inc.
  1. Average employee pay can provide great insight on the alignment of employee pay with management pay and shareholder value but the required analysis goes far beyond the pay ratio.
  2. Proxy disclosure can be dramatically improved by the addition of a single graph.
    1. The graph is a scatterplot of relative pay against relative performance showing the regression trendline and reporting the slope (“pay leverage”), the correlation (“pay alignment”) and the intercept (“the pay premium at industry average performance”).
    2. Unfortunately, few companies are willing to provide the graph and institutional investors don’t ask for it.
  3. Say on Pay voting can be used to assess the governance efforts of institutional investors including the giant passive investors (BlackRock, Vanguard and State Street).
    1. Active investors can use their excess return to demonstrate the value of their stock selection and oversight.
    2. Passive investors can’t use returns to demonstrate the value of their oversight, but they (and rating services like Morningstar) can use their proxy voting to demonstrate the value of their oversight.
      • We’ll show a measure of Say on Pay voting quality that measures whether an investor’s SOP voting is informed by objective measures of pay equity, fair to management and fair to shareholders.

Ron Rosenthal, Lead Consultant
Meridian Compensation Partners, LLC
  • 2019 Say on Pay Results/Trends
  • CEO pay ratio related shareholder proposals and proposed legislation
  • Large investors engagement priorities 
  • ISS Policy Updates
  • Regulatory Update

Patrick Haggerty, Partner
Pay Governance LLC
  • CEO Pay Ratio Background
  • Year-over-year ratios by industry and company size
  • What variables affect the ratio
  • How should Compensation Committees evaluate their ratios

Michael J. Kenney, Principal
FW Cook
  • Evolution of the CD&A (SEC Compliance -> Say-on-Pay Support Document -> Shareholder Communication Document)
  • Use of Realizable Pay to Further Investor Understanding
  • Expanded disclosure of director compensation due to expanded scrutiny
    • Benchmarking
    • Limits on compensation
  • Other Emerging Topics

Online CPE Pay Ratio

Online CPE Pay Ratio

Stephen F. O'ByrnePresidentShareholder Value Advisors Inc.

Stephen F. O’Byrne is President and co-founder of Shareholder Value Advisors Inc., a consulting firm that helps companies increase shareholder value through better performance measurement, incentive compensation and valuation analysis.  His work on measuring the strength and cost-efficiency of top management incentives has been published in the Harvard Business Review, the Journal of Investing, Conference Board Director Notes, the Journal of Applied Corporate Finance and the WorldatWork Journal.  He is the co-author, with Professor David Young of INSEAD, of EVA and Value-Based Management.  He was previously head of the compensation consulting practice at Stern Stewart & Co. and a Principal in the executive compensation practice at Towers Perrin.

Online CPE Pay Ratio

Ron RosenthalLead ConsultantMeridian Compensation Partners, LLC

Ron Rosenthal is a Lead Consultant at Meridian Compensation Partners, LLC. Ron has served corporate boards and senior management teams for 25 years, developing customized compensation programs aligned with business strategies. Ron provides guidance on a broad range of executive compensation matters including compensation strategy, peer group development, competitive assessments, incentive plan design, alignment of pay and performance, severance and change-in-control arrangements, and non-employee director compensation.

Ron has written numerous articles, and is a frequent speaker, on executive compensation matters.

Online CPE Pay Ratio

Patrick HaggertyPartnerPay Governance LLC

He specializes in the analysis, design and implementation of executive pay programs that drive shareholder value. Pat consults with publicly-traded, privately-owned and pre-IPO companies in a wide spectrum of industries regarding executive and non-employee director pay programs. His work includes pay level benchmarking (both U.S. and international positions), annual and long-term incentive plan design, and special situations.

Pat has worked with numerous Fortune 500 and other prominent companies, with a particular focus on healthcare companies.

Pat has been published in leading journals and newspapers, including the Directors & Boards, Agenda, and Financier Worldwide. Recently, he has written articles entitled “Activist Shareholders and Executive Compensation”, “Do companies known for innovation use incentive metrics that measure innovation?” and “2016 Compensation Trends in U.S.”

Online CPE Pay Ratio

Michael J. KenneyPrincipalFW Cook

Michael Kenney is a Principal in the Chicago office of FW Cook with eleven years of experience in executive compensation consulting.  His professional experiences and responsibilities include supporting senior consultants in the development of customized reward programs that align with client business strategies and human resources objectives, developing collaborative ongoing relationships with client human resources teams, managing the consulting team responsible for the preparation of client deliverables, and designing and preparing analytics that support the compensation decision-making process, among others.  Michael’s clients are both public and private companies in a variety of industries and company size categories.

He has spoken on the subjects of CEO pay ratio and ISS’ governance risk model, and authored the Firm’s 2011 Long-Term Incentive Grant Practices report on the prevalence and design of long-term incentives among the largest 250 corporations in the U.S.  Michael earned a B.A. in economics and a B.A. in statistics with honors from the University of Chicago


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Online CPE Pay Ratio

Course Level:
   Intermediate

Advance Preparation:
   Print and review course materials

Method Of Presentation:
   On-demand Webcast

Prerequisite:
   General knowledge of executive compensation

Course Code:
   148189

NY Category of CLE Credit:
   Areas of Professional Practice

NASBA Field of Study:
   Business Law - Technical

Total Credits:
    2.0 CLE

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About the Knowledge Group

The Knowledge Group

The Knowledge Group has been a leading global provider of Continuing Education (CLE, CPE) for over 13 Years. We produce over 450 LIVE webcasts annually and have a catalog of over 4,000 on-demand courses.

About the Knowledge Group

The Knowledge Group

The Knowledge Group has been a leading global provider of Continuing Education (CLE, CPE) for over 13 Years. We produce over 450 LIVE webcasts annually and have a catalog of over 4,000 on-demand courses.

Shareholder Value Advisors (SVA) is a consulting firm that helps companies improve performance through more effective business unit incentives.

Effective business unit incentives require (1) a well-designed measure of business value added, (2) accurate estimates of competitive pay and (3) a plan design that achieves the three basic objectives of executive pay: providing strong incentives to increase shareholder value, retaining key talent and limiting shareholder cost.

SVA’s distinctive capability is better measurement.  SVA’s work on measuring business value added isolates management’s contribution to value by adjusting for capital investment, investor expectations and peer company performance.  SVA’s work on competitive pay uses multiple regression models to get more accurate market rates by controlling for position, industry, size, profitability and risk.  SVA’s work on plan design uses a distinctive framework to measure alignment, incentive strength and the company’s pay premium at industry average performance using realizable as well as grant date pay.

Website: http://www.valueadvisors.com/

Meridian Compensation Partners has a singular focus: to provide the most effective solutions and independent advice in executive compensation and corporate governance consulting. With over 70 associates in ten offices in the US and Canada, Meridian provides top management, boards and compensation committees at public and private corporations with core services that include board level advisory services, compensation program design, research and competitive market intelligence on executive pay and governance matters. We are unique in our ability to provide a full array of services and capabilities and develop long-tenured, board-level consulting relationships to over 500 major publicly traded and privately held corporations. We serve companies across all industries, and have particular expertise in industry sectors with unique labor markets, business metrics, and compensation practices. We guide clients through challenging issues and bring each relationship an independent perspective, expertise, knowledge, and deep resources.

Website: http://www.meridiancp.com/

Pay Governance LLC is an independent firm that serves as a trusted advisor on executive compensation matters. Our work helps to ensure that our clients' executive rewards programs are strongly aligned with performance and supportive of appropriate corporate governance practices.

We assist in developing an overall framework and governing philosophy, which describes the company’s approach to all aspects of pay. We utilize decision-quality data to assist compensation committees in making fully informed decisions.

We evaluate incentive and other executive program designs to:

  • Ensure that plans meet the company’s philosophy
  • Support corporate strategy and organization
  • Ensure performance measures are appropriate and consistent with the company’s value creation objectives
  • Improve “line of sight”
  • Align executive interests with those of shareholders
  • Be tax, accounting, and dilution efficient
  • Align pay and performance

We keep compensation committees informed and educated on emerging trends and key developments in executive compensation

We perform periodic reviews of executive arrangements, benefits and perquisites from both a “how” and “how much” perspective.

We work with compensation committees to ensure compliance with relevant regulations and best practices.

Website: http://paygovernance.com/

FW Cook is an independent executive compensation consulting firm that provides objective advice to boards and management of the world’s leading companies. Our firm’s principal objective is to add value to the executive pay programs and processes of our clients. Our consultants collaborate with clients to solve complex problems and design programs that support their business strategy and successfully link executive pay to shareholder value. Founded in 1973, we serve public, private, and tax-exempt organizations across a broad spectrum of industries.  With the largest market share of board engagements among our competitors, we currently serve over 750 clients. FW Cook’s offices are located in New York, Chicago, Los Angeles, San Francisco, Atlanta, Houston, and Boston. To learn more about us or to join our mailing list, visit us on the web at www.fwcook.com.

Website: https://www.fwcook.com/

Stephen F. O’Byrne is President and co-founder of Shareholder Value Advisors Inc., a consulting firm that helps companies increase shareholder value through better performance measurement, incentive compensation and valuation analysis.  His work on measuring the strength and cost-efficiency of top management incentives has been published in the Harvard Business Review, the Journal of Investing, Conference Board Director Notes, the Journal of Applied Corporate Finance and the WorldatWork Journal.  He is the co-author, with Professor David Young of INSEAD, of EVA and Value-Based Management.  He was previously head of the compensation consulting practice at Stern Stewart & Co. and a Principal in the executive compensation practice at Towers Perrin.

Ron Rosenthal is a Lead Consultant at Meridian Compensation Partners, LLC. Ron has served corporate boards and senior management teams for 25 years, developing customized compensation programs aligned with business strategies. Ron provides guidance on a broad range of executive compensation matters including compensation strategy, peer group development, competitive assessments, incentive plan design, alignment of pay and performance, severance and change-in-control arrangements, and non-employee director compensation.

Ron has written numerous articles, and is a frequent speaker, on executive compensation matters.

He specializes in the analysis, design and implementation of executive pay programs that drive shareholder value. Pat consults with publicly-traded, privately-owned and pre-IPO companies in a wide spectrum of industries regarding executive and non-employee director pay programs. His work includes pay level benchmarking (both U.S. and international positions), annual and long-term incentive plan design, and special situations.

Pat has worked with numerous Fortune 500 and other prominent companies, with a particular focus on healthcare companies.

Pat has been published in leading journals and newspapers, including the Directors & Boards, Agenda, and Financier Worldwide. Recently, he has written articles entitled “Activist Shareholders and Executive Compensation”, “Do companies known for innovation use incentive metrics that measure innovation?” and “2016 Compensation Trends in U.S.”

Michael Kenney is a Principal in the Chicago office of FW Cook with eleven years of experience in executive compensation consulting.  His professional experiences and responsibilities include supporting senior consultants in the development of customized reward programs that align with client business strategies and human resources objectives, developing collaborative ongoing relationships with client human resources teams, managing the consulting team responsible for the preparation of client deliverables, and designing and preparing analytics that support the compensation decision-making process, among others.  Michael’s clients are both public and private companies in a variety of industries and company size categories.

He has spoken on the subjects of CEO pay ratio and ISS’ governance risk model, and authored the Firm’s 2011 Long-Term Incentive Grant Practices report on the prevalence and design of long-term incentives among the largest 250 corporations in the U.S.  Michael earned a B.A. in economics and a B.A. in statistics with honors from the University of Chicago

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