In 2011, the first Say on Pay (SOP) votes ushered in the modern era of executive compensation governance for U.S. public companies.

In this Viewpoint, the second of our 2024 SOP series, we explore the trends that may have led ISS to recommend against SOP at a historically low rate.

Thousands of companies, including more than 70% of the S&P 500 companies, grant performance stock units (PSUs) with relative total shareholder return (TSR) or stock price performance-vesting conditions. These incentives can be very motivational, help align management rewards with shareholder returns, and are strongly favored by some investors and proxy advisors.

In 2023, Pay Governance research concluded that the information afforded by the new pay versus performance (PVP) disclosures could be reasonably used to assess the alignment of pay and performance, using Compensation Actually Paid (CAP) and relative total shareholder return (TSR) (see Viewpoint Utilizing Compensation Actually Paid to Evaluate Pay and Performance).