Tag Archives: internal pay equity

BlackRock sets its priorities for board engagement

by Cydney Posner

Asset management firm BlackRock (reportedly the largest, with $5.1 trillion under management) has identified its “Investment Stewardship” priorities for 2017-2018, intended to help companies prepare for engaging with BlackRock. Among the hot topics are governance (including board composition and diversity), corporate strategy for long-term value creation in light of shifting assumptions, executive pay linked to long-term strategy, climate risk disclosure and human capital management.  According to BlackRock, its engagement process is designed to be constructive, and its goal is “to build mutual understanding and ask probing questions, not to tell companies what to do. Where we believe a company’s business or governance practices fall short, we explain our concerns and expectations, and then allow time for a considered response.” However, Blackrock’s approach is not limited to engagement; although, as a long-term investor, the firm will be “patient” as companies work to address concerns, in the absence of progress, BlackRock “will not hesitate to exercise our right to vote against management recommendations.” Continue reading

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Filed under Corporate Governance, Executive Compensation

CEO-employee pay ratios may not be as bad as feared, says Mercer study

by Cydney Posner

There’s been a lot of hand-wringing about what the data will show when public companies are finally required, in 2018, to disclose their CEO-to-median-employee pay ratios as required by new SEC rules implementing Dodd-Frank (discussed in this Cooley Alert).  Not to worry! Those ratios promise to be lower than anticipated, says a just-completed CEO Pay Ratio Survey conducted by compensation consulting firm Mercer.   Continue reading

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Filed under Executive Compensation, Securities

Republicans to SEC Chair: delay pay ratio rules. Is a repeal attempt in the offing?

by Cydney Posner

The WSJ reports that three Republican congressman — House Financial Services Committee Chairman Jeb Hensarling, and Reps. Scott Garrett  and Bill Huizenga —  have written to SEC Chair Mary Jo White urging that the SEC stop spending time on the pay-ratio disclosure rules and prioritize completing rulemaking required under the JOBS Act, such as the crowdfunding rules. The Committee is not exactly enamored of pay-ratio disclosure.  In fact, in prior years, the House Financial Services Committee has advanced bills seeking to repeal the pay-ratio disclosure requirement, but Senate Democrats made clear at the time that they opposed repeal.  (See, e.g., my news briefs of 6/24/11, 7/13/11 and 6/20/13.) With Republicans soon to be in control of both the House and the Senate, warnings to the SEC by Republican congressmen suddenly take on a new significance. More to the point, is there another repeal attempt in the works? Continue reading

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Filed under Securities