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.
In August 2020, the SEC adopted rule amendments that now require public companies to disclose information about “Human Capital Management” (HCM). Prior to the pandemic, HCM issues were gaining tremendous traction, and, of course, the COVID-19 pandemic further shed light on the notion that a focus on employees is material to a company’s overall value. A recent blog series from Equilar detailed notable examples of disclosures around this topic.
California made history in 2020 when it became the first state to pass a bill that requires public companies to have at least one ethnically diverse board member. According to a January 2021 Equilar analysis, over half (52.9%) of affected companies currently meet the bill’s 2021 requirements, though just 16.3% of companies meet the provisions set forth in the bill that are required by the end of 2022.
The larger public companies in California are tracking marginally better. The Equilar analysis also found that nearly two-thirds (65.3%) of Russell 3000 companies headquartered in California already meet the 2021 requirement. Meanwhile, in January 2021, 21.3% of Russell 3000 companies met the requirements for the 2022 deadline, an improvement from 17.5% last August.
Equilar’s “CEO Tracker” series looks at employment trends at the top level of the largest U.S. companies on a quarterly basis. At the end of 2020, the data shows that 70 CEOs at Equilar 500 companies announced their resignations during the year, down from 80 the year prior. One of the most notable trends from the Q4 2020 edition of the report was that 15% of announced CEO appointments in 2020 were women, up from 12% in 2019 and just 6% in 2018. However, the number of women CEOs still remains small. While nine women were appointed CEO at Equilar 500 companies in 2020, six women announced departures from this top executive role.