Inside the 2023 Investor Stewardship Report

November 6, 2023

Kira Ciccarelli

Findings from the Diligent Market Intelligence: Investor Stewardship 2023 report reveals U.S. say on pay proposals received increased investor backing in the 2023 season.

Investor support for S&P 500 say on pay proposals increased for the first time in five years, with CEO average realized pay declining by 68% to $25.6 million, compared to $79.9 million in 2021.

S&P 500 say on pay resolutions won 88.9% average support this season, up from 87.8% a season prior, according to the report. This is in large part due to issuers addressing shareholder requests for more modest realized pay, alongside fewer one-time retention awards. 

“Rising inflation and depressed markets played a role in shaping investor voting patterns in the 2023 season. Boards should analyze and benchmark data to understand and address shareholder concerns, while asset managers must identify risk factors that could upend their portfolios.” 

-Josh Black, Editor-in-Chief, Diligent Market Intelligence

The rise of ESG funds, a pandemic and social movements centered on diversity, equity and inclusion (DEI) have also forced investors to ask tougher questions and demand transparency over how companies treated business risks. Shareholder proposals seeking freedom of association reporting, alongside requests for broader human rights disclosure, won the backing of investors. Proposals seeking understanding of CEO pay structures, specifically severance payments and clawback policies, also won support. 

Below, we explore key three key themes that emerged from the report’s findings.

Pay plan support increases

S&P 500 average CEO realized compensation decreased by 68% to $25.6 million in 2022, compared to $79.9 million in 2021. 

In response to more modest payouts, S&P 500 say on pay resolutions won 88.9% average support, up from 87.8% a season prior. 2023 marks the first time in five years where support for say on pay proposals increased in comparison to the previous season. 

Rising inflation drives investor attention to employee welfare and CEO pay

Average support for U.S. environmental and social shareholder proposals nearly halved to 19.6% in the 2023 season, compared to 27.7% a season prior. 

Social proposals gained traction amid cost-of-living concerns. The nine freedom of association proposals subject to a vote in the U.S. won 35.5% average support, up from one winning 38.9% support a season prior. 

Average support for the two proposals asking U.S.-listed companies to approve clawback provisions increased to 41.5%, compared to 27.5% a season prior. 

More companies are citing cybersecurity and AI risks

Companies are facing a growing number of risks, with the average S&P 500 company disclosing 34.4 risk factors in 2023 10-K reporting. This number has risen steadily since 2020, where the average company disclosed 32.7 risks, indicating a need for a connected view of risk.

Nearly 80% of S&P 500 companies cited cybersecurity risks in 2023 and over 18% cited AI risks, up from roughly 79% and 14% in 2022, respectively. 

About Diligent Market Intelligence  

Diligent Market Intelligence (DMI) is a market-leading provider of shareholder activism, investor voting, and corporate governance data. Through its web application and data feeds, clients can access the most complete solution for listed company intelligence on the market, with broader and deeper insights than ever before. 

About the author

Lead Research Specialist

Kira Ciccarelli is the Lead Research Specialist of the Diligent Institute, the modern governance think tank and global research arm of Diligent Corporation. In her role, Kira researches and produces high-level modern governance reports, blog articles and podcasts designed to inform director decision-making and highlight best practices.

Before joining Diligent, Kira worked in a variety of data-driven research roles, including analyzing global aid funds to the UN Sustainable Development Goals (SDGs) and compiling a meta-analysis of political experimental findings for the Analyst Institute. She holds a BA in Public Policy from the College of William & Mary.

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