The Equilar Institute provides in-depth research and analysis on boards of directors, shareholder engagement, executive compensation and other issues affecting the world of corporate governance. Below are some key highlights from the last quarter that showcase the in-depth information available in public filings via the Equilar database. Visit www.equilar.com/institute or www.equilar.com/blog.html to read these articles in full as well as many more.
As boards look to bring in new talent to supplement their experience and expertise, many are considering younger directors who have the expertise to steer companies toward the adoption of new technologies and business practices. In this Fall 2019 study, Equilar examined directors under 40 years old across the Equilar 500, as well as median director age.
David Drahi, who sits on the board at Altice USA, Inc., was the youngest director in 2019 at 24 years old. Of the 31 directors under 40 from the study, 21 were men and 10 were women.
Over the past few years, the responsibilities of the top legal officers within large public companies have continued to expand. General Counsel are expected to keep pace with the shifting political and business landscapes of the regions in which their businesses operate. Given the increased responsibility, compensation for General Counsel has been on the rise. An Equilar study examined the highest-paid General Counsel across the Equilar 500. In 2018, the highest-paid General Counsel was David Drummond of Alphabet Inc., who made almost $47.3 million in total compensation. Drummond was followed by Katherine Adams of Apple and Gerson Zweifach of Twenty-First Century Fox, who earned $26.7 and $17.8 million, respectively in 2018.
In August 2019, the Business Roundtable released a report in which they advocated for the “Stakeholder Model” of capitalism. The Stakeholder Model follows the philosophy that all stakeholders—shareholders, employees, customers and the communities in which a business operates—should be considered when making decisions about the management and corporate governance of a company. Following this announcement, Equilar examined the use of non-financial metrics in designing short-term incentive plans for named executive officers (NEOs), and how the prevalence of these various metrics supports or hinders the new model that the Business Roundtable conceptualized.
Equilar found that, while the number and percentage of Equilar 500 companies using various non-financial metrics peaked in 2017, overall, the figures have stayed relatively flat over the last five years, hovering at around 50% of total companies using at least one non-financial metric to evaluate executive performance. While the number of companies using these metrics has not changed much, the relative prevalence of certain specific metrics has shifted significantly over this time period.