CEO pay attracts a lot of attention in ordinary times, but in times of severe economic distress when corporate performance and stock prices plummet and companies engage in substantial lay-offs, furloughs and pay cuts for employees, CEO pay can attract intense scrutiny. In those circumstances, paying the same or greater levels of CEO compensation can seem unfair to employees and invite shareholder and public criticism. How have boards addressed this issue?
The Financial Reporting Council recently published an updated version of its guidance for companies on corporate governance and reporting during the COVID-19 crisis to include new sections on exceptional or similar items and alternative performance measures.
While company managements have long engaged with shareholders at annual meetings and investor presentations, the notion of director engagement with shareholders is a more recent development. But why is shareholder engagement increasingly being added to corporate director job descriptions? This article posits several theories for the trend and identifies the most common engagement topics, provides data on the frequency of engagement and highlights emerging practices relating to director engagement.
A recent discussion on the Business Roundtable's adoption of a new statement on the purpose of a corporation concluded by observing (rhetorically) that the question raised by the statement was what all of the signatories would actually do to fulfil their corporate social responsibility commitments. Apparently, some non-governmental organisations are now asking that question for real and, ironically, one of the first recipients is a well-known leader of the pack on commitments to all stakeholders.
In July 2019 Representative Carolyn Maloney contacted Securities and Exchange Commission Commissioner Robert Jackson to solicit his views on legislation that would require public companies to disclose their corporate political spending. In his recent response, Jackson declared that the absence of transparency about political spending has led to a lack of accountability, allowing executives to spend shareholder money on politics in a way that serves the interests of insiders, not investors.