DEI-Tied Executive Pay Loses Ground at Companies Amid Backlash

More companies are ditching diversity, equity, and inclusion metrics to help determine their executives’ compensation amid a conservative backlash against corporate DEI programs.

The pullback, however, doesn’t mean the popular tie-in has been abandoned. In fact, a majority of S&P 500 companies and more than 40% of Russell 3000 firms that use environmental, social, and governance metrics in executive pay still link compensation to achieving DEI goals, according to a report the Conference Board, ESGAUGE, and FW Cook released Thursday. READ MORE

Research finds CEOs innovate — or don’t — based on compensation packages and input from analysts


West Virginia University research shows the stock market shapes chief executive officers’ commitments to innovation through mechanisms that range from CEO pay packages to feedback from financial analysts.

“The investment industry usually views financial analysts’ feedback, such as earnings forecasts, as impeding innovation because of the pressure the feedback puts on CEOs,” said Xinchun Wang, associate professor of marketing at the WVU John Chambers College of Business and Economics. “But not all feedback provided by analysts generates that kind of pressure. Stock recommendations actually foster explorative activities like research and development — investments that, although risky, can positively affect long-term returns.” READ MORE

Elon Musk won’t get his $55 billion pay package after all

Elon Musk isn’t going to get that $55 billion pay package after all, a Delaware Chancery Court judge has ruled.

Tesla shareholders approved the package in 2018, which gave Musk incentive to hit specific milestones, including a market valuation of $650 billion, which was more than 10 times the valuation at the time. The trial hinged on a specific question: did Musk mislead the shareholders when he gave them the plan? READ MORE

IBM investors staged 2021 revolt over exec pay

IBM moved to appease shareholders that last year revolted against executive compensation proposals when they contested the massive one-time equity award granted to former Red Hat boss Jim Whitehurst.

Whitehurst, who was made IBM President following Big Blue's $34bn buy of Red Hat, was to be handed a compensation package of more than $27m last year, including $22.4m in stock awards. This upset investors. READ MORE

SEC proposes new rule mandating funds disclose votes on executive pay

The Securities and Exchange Commission voted Wednesday to propose several new rules related to institutional investment funds’ votes on proxy proposals, including whether they support companies’ compensation packages for their top executives.

The Dodd-Frank financial reform law, passed in the wake of the 2008 financial crisis, required public companies to hold non-binding shareholder proxy votes on the compensation of their most highly paid executives. It also required companies to disclose so-called “golden parachute” agreements, or compensation arrangements for executives in the event of a merger, acquisition or other transaction. READ MORE