Executive pay at the nation's largest corporations has more than quadrupled since the 1970s. In light of steeply rising income disparity in the U.S., extravagant CEO pay remains intensely unpopular, and presents significant material and reputational risks for firms. This is particularly true in financial institutions where excessive pay is seen to incentivize excessive risk-taking.
While expanded reporting of executive compensation is mandatory under Dodd-Frank, more comprehensive public disclosures around the structuring of pay packages is sought by investors as a question of good corporate governance. ICCR members call for executive pay formulas that reconcile compensation with specific performance metrics including ESG performance and that align more appropriately with the salaries of average employees.
Featured ICCR Initiative
Vertical Comparison of Executive Compensation. ICCR members support mechanisms that better link compensation packages to both financial and ESG performance metrics. Improved alignment of compensation to financial performance controls excessive risk-taking and an integration of ESG goals ensures that executives remain mindful of corporate social and environmental impacts. This year they filed a compensation resolution with 2 companies, calling for an examination of vertical comparison metrics that would help benchmark average employee and executive pay to help companies develop more sustainable compensation models.
This year, ICCR members sent vertical comparison of executive compensation resolutions to companies, Canadian Imperial Bank and Royal Bank of Canada.