Companies see strong support for executive pay programs in 2024 

  • Amy Knieriem
    Senior Principal, Senior Legal Consultant
  • Carol Silverman
    Partner, Senior Legal Consultant
  • Paige O’Neal
    Career Consulting Analyst, Mercer

Companies are seeing strong shareholder support for their executive pay programs so far in 2024.

The failure rate fell to its lowest level (about 1%) in six years, with average support levels and favorable votes of at least 90%, slightly higher than 2023, as reported through July 31, 2024. These results may be largely attributable to strong stock price performance, given the S&P 500 was up more than 24% in 2023 ― making it less likely that shareholders would push back on executive pay levels ― and a “return to normal” with special actions to address challenges like COVID in the rearview mirror. Also, Institutional Shareholder Services (ISS) issued fewer “against” recommendations than in prior years and, failure rates where ISS issued an “against” recommendation were significantly lower, perhaps indicating that companies are successfully engaging with shareholders to address their concerns.

2024 (reported as of July 31) vs. 2023 stats

Indicators of higher support this proxy season include:
  • Higher average support levels.
     Support at all-size companies is averaging 90.5% (up from 89.6% as of July 31, 2023, and 89.5% for all of 2023). Support at S&P 500 companies is averaging 89.6% (up from 88.7% as of both July 31, 2023, and for all of 2023).
  • More companies receiving support levels of at least 90%. 
    71.0% of all-size companies received at least 90% support (up from 68.6% as of July 31, 2023, and 68.5% for all of 2023); 70.2% of S&P 500 companies received at least 90% support (up from 69.1% as of July 31, 2023, and 69.4% for all of 2023). 
  • Lower failure rates.

    Failure rates are lower than as of July 31, 2023 for both all-size companies and S&P 500 companies:

    ─ Out of 2,737 all-size companies reporting results, 1.2% (34) received less than 50% support, compared to 2.0% (57 out of 2,831) as of July 31, 2023, and 2.0% (67 out of 3,288) for all of 2023.

    ─ Out of 433 S&P 500 companies reporting results, 0.9% (4) received less than 50% support, compared to 2.5% (11 out of 447) as of July 31, 2023, and 2.6% (13 out of 493) for all of 2023. 

  • Fewer ISS against recommendations and less impact on failure rates.

     ISS has recommended shareholders vote against say-on-pay proposals at all-size companies at a rate of 12.2% (down from 13.3% as of July 31, 2023, and 13.5% for all of 2023) and 7.9% at S&P 500 companies (down from 9.4% as of July 31, 2023, and 9.5% for all of 2023).

    Failures where ISS issued an “against” recommendation are significantly lower at all-size companies (8.7% vs. 13.6% as of July 31, 2023, and 13.1% for all of 2023) and S&P 500 companies (11.8% vs. 26.2% as of July 31, 2023, and 27.7% for all of 2023).

About the authors
Amy Knieriem
Carol Silverman
Paige O’Neal
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