- About CII
- Board of Directors
- U.S. Asset Owners Advisory Council
- Corporate Governance Advisory Council
- Markets Advisory Council
- CII Staff
- Press Releases
CII Virtual Fall Conference, September 22-24 CII Elects Board Members for 2021-2022 CII Virtual Spring Conference, March 8-10 SEC Muzzles the Voice of Investors by Raising the Bar on Shareholder Proposals Leading Investor Group Seeks Strengthened Sustainability Reporting CII Virtual Fall Conference, September 17-22 Leading Investor Group Dismayed by SEC Proxy Advice Rules Leading Investor Group Calls for Action on Racism Amy Borrus to Become Executive Director of the
Council of Institutional Investors on July 1
CII Statement on Virtual Shareholder Meetings During Public Health Emergency CII Elects Board Members for 2020-2021, Approves Three Policies CII Spring Conference, March 9-11, Washington, D.C. Leading Investor Group Blasts SEC’s Proposed Rules for Proxy Advice and Shareholder Proposals CII Announces Advisory Council Members for 2020 Leading Investor Group Rebukes SEC for Proposed Rules That Undercut Critical Shareholder Rights Leading Investor Group Urges Companies to Commit to Long-Term Executive Compensation Council of Institutional Investors Board Appoints Amy Borrus to Succeed Ken Bertsch as Executive Director Media Advisory: CII Fall Conference, September 16-18, Minneapolis Council of Institutional Investors Responds to Business
Roundtable Statement on Corporate Purpose
Leading Investor Group Calls Out Directors Responsible for
Dual-Class Companies Without “Sunsets”
Leading Investor Group Petitions SEC to Require Clear Disclosure on CEO Pay Targets Council of Institutional Investors Says Lyft’s Planned Dual-Class Structure is Harmful to Investors Media Advisory
CII Spring Conference, March 4-6, Washington, D.C.
CII Statement on Share Buybacks CII Research and Education Fund Publishes
Guide to Disclosure of Board Evaluation Processes
Investor Group Applauds CommonSense Principles 2.0 CII Fall Conference, October 23-25, New York City Leading Investor Group Responds to President’s Tweet on Quarterly Financial Reporting Investor Group Responds to Wall Street Journal Editorial CII Applauds Shareholder Protections in House Bill CII Elects New Board, Names Florida SBA Executive
Director & CIO Ashbel Williams Chair
New Report Details Practical Steps Corporate Boards Can Take to Combat Sexual Harassment CII Applauds SEC Commissioner Jackson's Call for Listing Standards to Require Sunsets on Dual-Class Stock CII Spring Conference, March 12-14, Washington. D.C. CII Announces Advisory Council Members for 2018 CII Report Highlights Risks Associated with a Common Chinese Corporate Structure Institutional Investors Oppose Stitch Fix Dual-Class Structure but Welcome Sunset Provision Uber’s Governance — Investor Response Do Not Disadvantage US Investors on Research,
CII Asks SEC
CII Fall Conference, September 13-15, San Diego CII Welcomes S&P Dow Jones’ Decision to Ban New Multi-Class Companies from Key Stock Indexes CII Applauds FTSE Russell Decision to Set Voting Rights
Minimum for Inclusion on Indexes
Investor Group Urges Blue Apron to Ditch No-Vote Shares Institutional Investors Dismayed by House Passage of
Financial CHOICE Act
CII, Institutional Investors with $4+ Trillion in Assets Oppose
Anti-Shareholder Provisions of the CHOICE Act
- CII in the News
- Governance & Financial Information
- Contact Us
- CII Research and Education Fund
Leading Investor Group Urges Companies to Commit to Long-Term Executive Compensation
Minneapolis, Sept. 18, 2019 —The Council of Institutional Investors September 17 overhauled its policy on executive compensation, urging public companies to dial back the complexity of their executive compensation plans and set longer periods for measuring performance for incentive pay.
While acknowledging that boards of directors need to tailor pay packages to company-specific circumstances, the new policy suggests firms explore adopting simpler plans comprised of salary and restricted shares that vest over five years or more. The policy also recommends that companies consider barring the CEO and CFO from selling stock awarded to them until after they depart to ensure management prioritizes the company’s long-term success.
“The policy revision reflects concerns on excessive complexity in U.S. executive pay plans, and questions on the effectiveness of some approaches to pay-for performance,” said CII Executive Director Ken Bertsch. “Steadily rising average pay, even when market performance is mediocre, suggests that pay-for-performance can be a mirage.”
The policy suggests boards and investors step up their scrutiny of performance-vesting shares—stock awarded based on achievement of corporate performance milestones. Although these arrangements can work very well for some companies, recent research calls into question whether they provide a strong enough connection to long-term company performance on a broad level. Their goals and metrics can be numerous, wide-ranging, adjustable and hard to understand.
Responding to the widening gap between compensation for workers and executives, the new CII policy recognizes rank-and-file pay as a valid “reference point” for setting executive pay at appropriate levels.
The policy also expands the circumstances under which boards should have legitimate discretion to claw back executive pay, covering not only financial restatements but also personal misconduct and ethical lapses that cause material reputational harm.
Click for PDF version. For media inquiries, please contact CII Editor Rosemary Lally.