Many investors have rejected compensation plan of record number of executives during motions of various US-listed companies this year, stated a report by Reuters. These investors were against pay rise and easing of performance targets in the wake of the COVID-19 pandemic.
According to an analysis by consulting firm ISS Corporate Solutions, there are companies that are arguing that such move may disincentivise the top brass and so to keep them motivated and help business to bounce back, these moves will be critical. The investors argue that shifting performance targets will demotivate employees who are not shielded liked these executives.
The firm stated that a record 14 S&P 500 companies had more than 50 per cent of investors reject executive pay packages so far this year. "That number is set to rise as more executives face votes in the coming weeks," according to ISS Corporate Solutions. Investors voted down a total of 12 CEO pay plans in 2020.
"We still have 200 or more meetings to go, and we are likely to see more failures," said Brian Johnson, an executive director at ISS Corporate Solutions.