Posts Tagged ‘Subodh Mishra’

Post-Crisis Trends in U.S. Executive Pay

Posted by Carol Bowie, Institutional Shareholder Services Inc., on Monday February 27, 2012 at 10:07 am
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Editor’s Note: Carol Bowie is an Executive Director of MSCI and head of compensation policy development at ISS. This post is based on an ISS white paper by Subodh Mishra, available in full here.

Though the global financial crisis of 2008 prompted a seismic shift in attitudes toward executive pay on the part of lawmakers, the public, investors, and other stakeholders, average compensation levels continue to rise or have returned to where they were before the crisis.

Mindful of the outcry over particular elements of pay packages, companies began scaling back bonus awards as well as payments related to “golden parachutes” and other forms of exit pay following the crisis.

Indeed, such components of executives’ total annual compensation declined in fiscal 2009 with some elements, including those dealing with exit pay, continuing to decline modestly into fiscal 2010.

But that has been more than offset through increases in other pay elements, most notably awards tied to company stock. The result is a 37 percent surge in total annual compensation paid to C-suite officers from fiscal 2008 to 2010 with stock awards now constituting more than half of the total pay pie.

As such, this post explores how the executive pay package mix and overall total annual compensation levels have changed since fiscal 2008 and the role played by stock-based awards in fueling the spike in total executive pay.

…continue reading: Post-Crisis Trends in U.S. Executive Pay

Bridging the Pay Divide

Posted by Scott Hirst, co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Thursday December 29, 2011 at 10:19 am
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Editor’s Note: The following post comes to us from Subodh Mishra, Head of Governance Exchange at Institutional Shareholder Services, and is based on an ISS white paper by Mr. Mishra, available, including appendix, here.

Introduction

Investors have for a number of years expressed concerns over pay disparities between that of the chief executive officer and the next highest paid executive at U.S. corporations. The State of Connecticut pension system gave voice in 2008 to these concerns by filing shareholder proposals calling for enhanced disclosure of how internal pay equity factors into the pay-setting process. The targeted corporations were receptive to those concerns and agreed to implement the pension fund’s substantive demands.

Moreover, credit ratings agency Moody’s suggests pay gap multipliers in excess of three times the pay of the second highest paid officer can adversely affect a company’s cost of capital and debt rating. A high ratio between CEO pay and compensation for other named executives can indicate the company is CEO-centric, with associated CEO succession risk, according to Moody’s. [1] The ratings agency acknowledges that high internal pay equity can be a reflection of a CEO’s influence and centrality to a company, though argues “such a large disparity may indicate … concentration of power in the CEO.”

…continue reading: Bridging the Pay Divide

Executive Pay Through a Peer Benchmarking Lens

Posted by Scott Hirst, co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Tuesday September 6, 2011 at 9:48 am
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Editor’s Note: The following post comes to us from Subodh Mishra, Vice President at Institutional Shareholder Services, and is based on an ISS white paper by Daniel Cheng, available here.

Introduction

The enhanced executive compensation disclosures mandated by the U.S. Securities and Exchange Commission in 2006 have provided a significant new data set for investors and companies to analyze and benchmark pay practices across a broad set of U.S. corporate issuers.

Moreover, precisely how companies choose to benchmark their pay practices has received much attention following the outcry over Wall Street payouts and the recent promulgation of legislation requiring most U.S. issuers put their pay to a precatory shareholder vote.

Against this backdrop, Executive Pay Through a Peer Benchmarking Lens summarizes key findings from ISS Corporate Services’ study of almost 15,000 Def 14A filings over the past four years. Drawing on ISS’ executive compensation database, the focus of the analysis is on both pay levels as well as the processes by which companies benchmark their pay relative to peers.

…continue reading: Executive Pay Through a Peer Benchmarking Lens

 
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