Corporate Governance Outlook 2019

Corporate Governance Outlook 2019, an Equilar publication, analyzed the proxy statements and shareholder voting results for Equilar 500 companies from 2014 to 2018. The Equilar 500 tracks the 500 largest, by reported revenue, U.S.-headquartered companies trading on one of the major U.S. stock exchanges (NYSE, Nasdaq or NYSE MKT), adjusted to approximate the industry sector mix of similar large-cap indices. The report identifies trends in compensation and corporate governance disclosure practices including those that pertain to shareholder engagement policies, Say on Pay, the CEO Pay Ratio, board evaluation and more. Donnelly Financial Solutions (DFIN) and Hogan Lovells offered independent commentary to provide context and color on companies’ approach to governance issues and shareholder engagement.

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Key Findings:

• While the total number of shareholder proposals at Equilar 500 companies has remained relatively consistent over the last five years, there was a marked decline by 30.1% in the number of shareholder proposals relating to environmental and social issues.
• Nearly 75% of Equilar 500 companies mentioned or disclosed their shareholder engagement policies in their proxies, representing a continuous uptick since 2014.
• 2018 saw the number of Say on Pay failures nearly double, while less than half of Equilar 500 Say on Pay votes met with 95% or greater approval.
• In 2018, the median CEO Pay Ratio at Equilar 500 companies was 168 to 1, while the average CEO Pay Ratio was 271 to 1.
• Over 500 directors in the Equilar 500 are within five years of their respective boards’ mandatory retirement age, as of 2018. Additionally, nearly 80% of all mandatory retirement ages were either 72 or 75.