Say-on-Pay Watchlist, 2024

Say-on-pay is an advisory shareholder vote on a public company's named executive officer compensation, mandated by Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and codified at 15 U.S.C. § 78n-1. The SEC's implementing rules (Rule 14a-21) took effect for the 2011 proxy season. The vote is non-binding — even if shareholders reject the package, the company is not legally required to change it — but boards typically respond to low votes with structural pay changes the following year.

The thresholds proxy advisors use are well-documented. 95%+ approval signals strong support. 80–95% is the typical S&P 500 range. 70–80% raises proxy advisor concern and triggers shareholder engagement. Below 70% is the level where ISS flags a company for enhanced scrutiny, almost always with a published response from the board the following year. Below 50% is an outright failure — rare (only about 2–3% of Russell 3000 companies in any given year) but carries reputational consequences and almost always leads to material pay changes. In the current dataset, 0 companies on this watchlist failed (sub-50%), 0 are in the sub-70% scrutiny range, and 0 sit in the 70–80% engagement range.

The most common driver is pay-for-performance misalignment — large pay packages during stretches of negative or below-sector total shareholder return. Other recurring reasons: special one-time mega-grants without compelling justification, excessive perks, weak performance hurdles on long-term incentives, and concerns about peer-group selection. ISS and Glass Lewis both publish annual policy updates documenting the specific patterns they will recommend "against" on, which strongly influences how institutional shareholders ultimately vote.

Two proxy advisors dominate institutional voting on say-on-pay. Institutional Shareholder Services (ISS) advises more than 2,000 institutional investors; an ISS "against" recommendation typically reduces support by 20–30 percentage points. Glass Lewis is the second-largest proxy advisor and carries similar weight. The largest passive index providers — BlackRock, Vanguard, State Street — also publish their own voting frameworks and frequently diverge from the proxy advisors on specific issues.

Companies that earn a low vote routinely respond with: direct outreach to top institutional holders, more performance-share-unit weighting in the pay package, lower fixed pay, tighter performance hurdles, and a documented "shareholder engagement update" published in the next year's proxy. Research shows companies with failed votes (sub-50%) reduce CEO pay by 10–15% the following year on average. The full source for any company on this list is its DEF 14A and the 8-K reporting the vote — both available on the SEC EDGAR system at https://www.sec.gov/edgar.shtml. Updated April 2026.