Pearl Meyer's analysis of outlier director compensation among Russell 3000 Industrials companies based on ISS's new director pay policy and 2018 proxy disclosures reveals instructive guidance for other companies on compelling rationales that may justify their outlier pay positioning and avoid negative director vote recommendations. More specifically, Pearl Meyer characterizes these rationales for outlier director pay (from 2018 disclosures) as likely to pass muster with ISS:
- Director was board chair for part of the year and received chair retainers for a portion of the year
- Director was newly elected and received both an initial equity retainer and the annual retainer in the same year
- Director earned and received special transaction fees
- Newly elected director received a significant initial equity retainer
- Director received consulting fees
- Payment of dividend equivalents
The informative post also separately identifies likely compelling rationales for board chair and lead director pay outliers based on ISS's policy, which indicates that it will take into account board leadership roles in its analysis. This post first appeared in the weekly Society Alert!
While the analysis is limited to Industrial sector companies, Pearl Meyer expects its takeaways to be indicative for companies in other industries.
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