A historical analysis of say-on-pay results since 2011…

The 2023 Say-on-Pay season has a unique hallmark unlike previous SOP years: most companies within the S&P 500 have experienced significant decreases in total shareholder return (TSR) in the most recent performance year (2022) for the first time since SOP was mandated in 2011. These decreases have resulted in the S&P 500 index experiencing a -19% decline for 2022.

Pay Governance has compiled a significant amount of information on SOP outcomes and related TSRs for the S&P 500 since the dawn of the SOP era. They have analyzed these data to develop a framework for potential outcomes for the 2023 SOP season – and this Viewpoint presents a historical view on the relationship between S&P 500 SOP pass and fail rates and related TSR performance during the SOP era and, using history to forecast the future, provides an early potential 2023 SOP season forecast within in the context of negative shareholder returns experienced in 2022 by most of the S&P 500…