Excessive Executive Compensation: Investor Guidance

In recent decades, the average CEO of the largest U.S. company has made around 300 times as much as the median worker. This gap highlights a fundamental imbalance in how companies distribute resources, with outsized executive compensation awarded alongside wages that often fail to meet the basic needs of most employees. This wasn’t always the case. In 1965, CEOs were paid just 21 times as much as a typical worker.

This report lays out opportunities for investors to:

• Learn the role ICCR played in advancing Say-on-Pay voting rights for investors;
• Understand the systemic risks that income inequality and excessive executive pay pose to long-term diversified investors;
• View examples of investors who are addressing these concerns in Stewardship frameworks including Investment Policy Statements, Investment Beliefs or other governing documents, as applicable; and
• Strengthen proxy voting guidelines to ensure compensation issues are being addressed appropriately.

This report is also expected to be useful for asset owners who want to analyze their external managers’ voting records and stewardship practices.