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Pay Governance LLC is an independent firm that serves as a trusted advisor on executive compensation matters to board and compensation committees. Our work helps to ensure that our clients' executive rewards programs are strongly aligned with performance and supportive of appropriate corporate governance practices. We work with over 400 companies annually, are a team of nearly 70 professionals in the U.S. with affiliates in Europe and Asia with experience in a wide array of industries, company life cycles and special situations.

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Current Issues in Executive Compensation

Pay Governance understands that times remain uncertain. Our domain expertise remains executive compensation consulting. Therefore, each week we will continue to provide you with a short newsletter to keep you abreast of developments in the executive remuneration world.

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Featured Viewpoints

The "Great Resignation" and the C-Suite

Much has been written about the “Great Resignation” and its impact on the economy and society, leading to worker shortages. With COVID lockdowns; remote work; and, more recently, hybrid arrangements and a return to the office; our lives — both professionally and personally — have changed since early 2020.

In a broader sense, we are witnessing a fundamental transition in the relationship between employee and employer. To date, coverage has largely focused on the total workforce; for example, according to the Bureau of Labor Statistics, a record number of employees voluntarily resigned in 2021.[1] Some have attributed this to a continuing trend boosted by “work-from-anywhere” opportunities and fear of contracting COVID. The pandemic has also been a driver of “personal career resets,” shifting employees to organizations more aligned with their personal interests, values, and ambitions [2] (the “Great Upgrade,” as referred to by Bharat Ramamurti of the National Economic Council [3]). Joseph Fuller and William Kerr (Harvard Business School) take a comprehensive view, suggesting the broader labor force transition is attributable to “Five Rs: retirement, relocation, reconsideration, reshuffling, and reluctance.” [4]

We theorized that the drivers of the Great Resignation also broadly impacted the ranks of company leadership. Have executives been immune to these same forces, or has voluntary turnover increased because of them? Specifically, we wanted to examine whether, in fact, there has been a noticeable uptick in executive-level transitions during the pandemic.

To determine whether such a trend exists, we evaluated turnover among CEOs and CFOs at S&P 500 companies during the period of 2017-2022. We focused on general turnover for executive roles as the specific reason for turnover (e.g., resignation, involuntary termination, etc.) can be challenging to categorize through regulatory filings and public disclosures. In comparison to CEO turnover, the CFO position experienced a significant uptick in turnover during 2021, the focal point for the Great Resignation. As expected, CFO turnover was meaningfully higher than that of CEOs (5-year average turnover of 15.5% versus 10.4%) and we expect that broader C-suite turnover will continue to be higher than CEO turnover. Further, in the 2 years following the start of the pandemic (March 2020 – March 2022), 37% of S&P 500 companies appointed a new CFO. Consequently, CFOs who had served in the role for more than 10 years declined from pre-pandemic levels (12.6% in 2017, 11.0% in 2022).

Notes :
  • 2022 annualized values are based on turnover through Q1 2022.
  • Our data focus on CFOs as the most consistent example of non-CEO leadership during this timeframe given that reporting of CFOs in proxy filings is a requirement.
  • Annual CFO turnover is typically higher than CEO turnover in part because CFO turnover includes both lateral (CFO) and upward movement (CEO or other senior leadership roles).

While information on the specific cause of executive turnover is scarce, we opine that CEOs may have been more likely than CFOs to delay departure during the height of the pandemic to maintain the primary strategic leadership role (i.e., “face of the company”) in managing the challenges and complexities. This would help explain the uptick in expected later annualized CEO turnover from 2021 and 2022 as compared to the uptick in CFO turnover from 2020 to 2021. Regardless, our research supports that the drivers of the Great Resignation extended into the executive ranks.

We researched further questions about the type of executive movement (promotion versus external hire), prior experience, and the extent to which pay has influenced attrition rates. We will address these questions in future Viewpoints in this series.


[1] Ian Cook. “Who is Driving the Great Resignation?” Harvard Business Review. September 15, 2021.
[2] Ranjay Gulati. "The Great Resignation or the Great Rethink?" Harvard Business Review. March 22, 2022.
[3] Bharat Ramamurti. “The Great Upgrade.” Twitter. January 10, 2022.
[4] Joseph Fuller and William Kerr. "The Great Resignation Didn’t Start with the Pandemic." March 23, 2022.

Pay Governance Research Team: Aubrey Bout, Emily Chase, Stephen DeMaria, Joey Franks, Jose Lawani, Clement Ma, Lane Ringlee, and Christine Skizas.

General questions about this Viewpoint can be directed to Lane Ringlee ( and Stephen DeMaria (

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Featured Viewpoint

SEC Finalizes 10b5-1 Trading Plan Rule

Summary of Key Provisions

On December 14, 2022, the Securities and Exchange Commission (SEC) released the final Rule 10b5-1 requirements for preplanned trading plans for officers, other insiders, directors, and companies to qualify for the “affirmative defense” rule for such plans (i.e., the stock transaction was not entered into based on material non-public information). The new rule applies to trading plans entered on or after February 27, 2023.

The table below summarizes the impact on 10b5-1 plans and the related disclosure requirements.

SEC Rule 10b5-1 Implications and Considerations

Executives and directors who wish to avail themselves of the affirmative defense afforded trading plans under Rule 10b5-1 may need to consider whether to adopt such a plan prior to February 27, 2023, as it would be subject to fewer restrictions and the new disclosure requirements.

Companies and their advisers may also want to revisit their policies regarding the use of 10b5-1 compliant trading plans to buy and sell company stock. Several companies encourage, but do not require, the use of 10b5-1 plans while other companies require they be used or do not have a formal policy. Given the additional restrictions to qualify, some companies may be reluctant to require the use of such plans.

It is also advisable that companies establish rigorous internal controls for collecting and reporting the adoption, modification, and cancellation of both qualified 10b5-1 and nonqualified trading plans, as both types of arrangements are subject to quarterly reporting requirements.

Finally, compensation committees will need to discuss and approve a policy regarding the granting of stock options (and other forms of equity compensation) when they are in possession of MNPI, as the policy must be disclosed in the company’s proxy.

Stock Option Grant Table

As noted above, the following table is triggered by stock options, SARs, or similar instruments granted four days before or one day after the release of MNPI.


This Viewpoint is intended to inform compensation committees, executives, and compensation professionals about developments that may affect their companies; it should not be relied on as specific company advice or as a substitute for legal, accounting, or other professional advice.

General questions about this Viewpoint can be directed to Mike Kesner (

Featured Viewpoint

Clawback Rule Published in Federal Register – What it Means

The Securities and Exchange Commission (SEC) published its final clawback rule in the Federal Register on November 28, 2022, which establishes the following deadlines:

The stock exchanges are required to update their listing standards to incorporate the SEC’s final clawback rule no later than 90 days after the publication date, or February 27, 2023.

  • The SEC rule includes the minimum requirements for establishing a compliant clawback policy and each exchange has the discretion to incorporate more rigorous provisions.

The stock exchanges’ updated listing standards must become effective no later than one year after publication or November 28, 2023.

Companies have 60 days from the effective date of the listing standards to adopt a compliant clawback policy; assuming the exchanges set the effective date as of November 28, 2023, companies will need to adopt a compliant clawback policy no later than January 27, 2024.

Incentive-based compensation (as defined under the rules) earned by current or former executive officers based on the attainment financial measures (including stock price or TSR measures) for fiscal years ending after November 28, 2023 or compensation granted, earned, or vested on or after November 28, 2023 is covered by the clawback rules.


This Viewpoint is intended to inform compensation committees, executives, and compensation professionals about developments that may affect their companies; it should not be relied on as specific company advice or as a substitute for legal, accounting, or other professional advice.
General questions about this Viewpoint can be directed to Mike Kesner (


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