On behalf of the New York State Common Retirement Fund, New York State Comptroller Thomas DiNapoli announced that - based on its agreements with Microsoft Corp., CVS Health Corp., Macy's Inc., The TJX Companies Inc. and Salesforce.com to review their CEO and executive pay and adopt policies that consider the pay of the balance of their workforces, in lieu of simply setting their CEO pay by benchmarking against other CEOs (via company self-selected peer group data or otherwise) - the Fund withdrew its corresponding 2018 annual meeting shareholder proposals. The referenced company-Fund (and co-filers in some cases) letter agreements span the February - September 2018 time frame, and include (in all but one instance) the companies' then-proposed 2018 proxy statement disclosure.
DiNapoli commented:
We've seen a growing disparity in corporate income in the United States for years, with CEO pay rising dramatically while wages for most other company employees have remained flat. We are encouraging companies to adopt policies that take their entire workforce into consideration rather than setting CEO pay solely by benchmarking it against other CEOs. Overall employee compensation and executive pay has been and will continue to be a key factor for how we engage with companies going forward.
Further to our report last week: "Pay Ratio Disclosure: Investors Call for Supplemental Workforce Information" (DiNapoli being one of many signatories), the release notes DiNpoli's belief that companies should voluntarily supplement their required CEO pay ratio disclosure with additional workforce information to explain the ratio and provide context.
The Fund reportedly has a similar proposal pending with Archer-Daniels-Midland Company and plans to file additional proposals with other companies in 2019, after having struck agreements with BB&T Corp, Discovery Communications, and Regeneron Pharma on this issue in 2017.