Pearl Meyer, 10/24/17
Thorough data analysis shows that over half the companies have submitted a pro forma calculation of their CEO Pay Ratio, a required disclosure in 2018 proxies. 73% of all interviewed public company directors and members of management have not had any board discussions or set calendars to review this information. In a separate survey conducted in March of this year, 57% said the CEO Pay Ratio disclosure would have a negative impact on their workforce.
Companies in technology, healthcare, pharma and biotech appear to be most prepared in their communication, with about 44% in each industry reporting some level of board discussion on releasing a CEO Pay Ratio. 42% of public companies are projecting a CEO Pay Ratio between 101:1 and 250:1, while 18% expect a ratio of 251:1 or higher. The numbers are much different overseas.
CEO Pay Ratio disclosure shines a new spotlight on compensation relative to the company. Management and the board should be prepared to address the concerns that may arise from different stakeholders.
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