Shareholders voted their shares on average 91% to ratify executive compensation in advisory say-on-pay voting so far this proxy season, said a Willis Towers Watson report released Wednesday, reflecting 1,501 companies in the Russell 3000 stock index from Jan. 1 through June 3.
At 24, or 1.6%, of the companies, a majority rejected the pay packages in the non-binding voting.
By contrast, in all of last year, 61, or 2.8%, of the companies failed to receive a majority vote in support of the executive pay, although overall shareholders also approved pay at a 91% average level, based on 2,143 companies in the Russell 3000 reporting results.
“We look at changes in support year-over-year that might indicate some level of concern,” said Brian Myers, executive compensation consultant at Willis Towers Watson, in an interview. Since the beginning of the say-on-pay voting requirement in 2011, “the trend … in support has been around 90%,” Mr. Myers said. “I don’t think there are any surprises.”
On long-term equity incentive plans proposed by management, shareholders voted their shares on average 89% in support at 198 companies in the Standard & Poor’s 1500 index so far this year through June 3, the report said. No plan received less than a majority vote of approval.
Unlike say-on-pay voting, shareholder voting on long-term equity incentive plans is binding on companies, Mr. Myers said.
In all of 2015, based on 336 companies in the S&P 1500, shareholders approved the long-term plans by a 90% average vote and rejected the plan at only one company, the report said.
Regarding the different levels of support for equity plans in the two years, Mr. Myers said, “I don’t know if we have a definite trend at this point in time” in the proxy season.
