Despite the articles lauding the "insight" that the pay ratio disclosures will bring in 2018, this week ISS and a UK Shareholder group expressed doubts about the pay ratio's ability to provide useful information in a Bloomberg article examining how investors may use the disclosure.
The Overly Burdensome and Politically-Motivated Requirement Will Provide No Meaningful Data to Investors.
The Center On Executive Compensation filed comprehensive comments with the SEC on its prescriptive rule on pay for performance, noting that "it fails to provide a clear picture of the pay for performance link," likely creating "confusion and misunderstanding among shareholders" and urging a principles-based approach instead.
Only six of 494 S&P 500 companies failed to receive majority support for their say on pay proposals in 2014.
The 2014 proxy season featured a 15% drop in say on pay volatility - the number of companies which experienced a year-over-year change in say on pay support exceeding 20 percentage points.