Issue link: https://digital.shearman.com/i/1019978
Shearman & Sterling LLP 10 | CEO Pay Ratio: Perspectives on the First Year and A Look Forward Overwhelmingly, the S&P 500 companies surveyed chose not to draw attention to their pay ratio disclosure and placed it deep into their proxy statements. They also generally did not reference their pay ratio in either their proxy statement summary or in the summary or "highlights" section of their corporate governance or executive compensation practices. The level of detail provided by companies varied considerably both in terms of the length of their pay ratio disclosure as well as the level of detail of the calculation process. Location of Disclosure Level of Detail Pay Ratio Length FAST FACTS 432 words was the average length of pay ratio disclosures of the S&P 500 companies surveyed 83 to 1,038 words was the range of the length of pay ratio disclosures of the S&P 500 companies surveyed Approximately 77% of the S&P 500 companies surveyed included their pay ratio disclosure in the executive compensation section of their proxy statement. Our Survey found that only 12 companies, or 3%, of the S&P 500 companies surveyed included their pay ratio disclosure in the CD&A. Companies likely did not include pay ratio in the CD&A to not suggest that the pay ratio was a factor in the compensation committee's analysis and determination of executive pay. Many of the longer pay ratio disclosures were made by companies that presented alternate pay ratios or had multiple CEOs during the year. 93 99 85 21 45 30 12 11 4 99 or less words 100-199 words 200-299 words 300-399 words 400-499 words 500-599 words 600-699 words 700-799 words 800 or more words 34 companies, or 9%, of the S&P 500 companies surveyed had multiple CEOs during 2017 31 companies made adjustments, such as annualization, to the compensation of the person who was serving as CEO on the date used to select the median employee Of those that had multiple CEOs,