In a Wall Street Journal article titled “The Morning Risk Report: Poor Say-on-Pay Performance Spurs Engagement,” published on January 15, partner Doreen Lilienfeld (New York-Compensation, Governance & ERISA) commented on the correlation between a company’s weak say-on-pay performance and its increased disclosure the following year.
Referencing Shearman & Sterling’s executive compensation survey, Lilienfeld noted, “The companies that got below 70% approval in their say-on-pay votes the prior year, even if they passed, are the ones that provided the most detailed disclosure.”
Lilienfeld cautions against assuming that the converse is true. “Once companies put something in they get wedded to it and want to repeat, compare, update,” she says. “So I don’t think it follows as a conclusion that if results are better we’ll have less disclosure. We may have different disclosure but likely not less.”