Investor Relations Magazine – Biggest Fund Managers Continue to Support ‘Excessive’ CEO Pay Deals

By Garnet Roach

As You Sow research shows BlackRock, Vanguard and State Street approve ‘almost all’ CEO pay packages

Some of the world’s largest fund managers have been accused of nodding through excessive pay packages, according to research from As You Sow – though some dispute the data.

The California-based non-profit has published a list of what it says are the 100 most overpaid chief executives from the S&P 500 last year. It compiled the list by comparing remuneration with total shareholder return and then looked at votes against those packages.

The report, titled The 100 most overpaid CEOs 2019: Are fund managers asleep at the wheel? names Ronald Clarke of FLEETCOR Technologies at the top of the list, followed by Mark Hurd and Safra Catz at Oracle and Hock Tan from Broadcom in third place. And despite public outcry over excessive pay – and the introduction of new rules requiring companies to publish the ratio of their CEO’s pay to that of their median worker – As You Sow says chief executive pay in the S&P 500 continues to rise: data from Institutional Shareholder Services (ISS), published by As You Sow, shows the average pay for a CEO in the S&P 500 grew from $11.5 mn in 2013 to $13.6 mn in 2017, while the Financial Times notes that ‘the average S&P 500 company boss is paid 361 times more than [the firm’s] median worker’.

Voting down CEO pay

As well as listing the CEOs it deems most overpaid, As You Sow looks at the voting habits of some of the world’s biggest fund managers in relation to these ‘excessive’ pay packets.

As You Sow says Fidelity voted against just 7 percent of the top 100 pay packages and AXA Investment Management (AXA IM) voted against 9 percent – a figure the fund manager disputes. As You Sow says BlackRock against 11 percent, Vanguard against 14 percent and State Street Global Advisors (SSGA) against 15 percent.