Pay Governance Study Shows Continuing Shareholder Support for CEO Pay Model

NEW YORK (March 21, 2017) – CEO pay has continued to increase after the implementation of SOP under the Dodd-Frank Wall Street Reform Act, according to a new study from consulting firm Pay Governance ( The study also found that pay for S&P 500 chief executives was more compressed after SOP reform.

The researchers used a sample of more than 200 S&P 500 companies to examine chief executive pay trends over eight years, spanning the years before and after SOP implementation.

“Our research found that median CEO pay has continued to rise post-SOP. While this continued increase was disappointing to the advocates of SOP, this was not surprising to corporate directors, executives and most institutional investors,” said Pay Governance Managing Partner Ira Kay. “It is arguably another example of the CEO labor market’s relative competitiveness.”

While CEO pay continued to increase for most companies after SOP, the sample also compressed. Pay Governance found this was driven primarily by flat CEO pay at the 90th percentile of the sample for several years.

“This is a critical finding that suggests that the labor market for CEO pay remains robust, but the post-SOP governance environment may have constrained pay at the top of the distribution,” said Blaine Martin, consultant and researcher at Pay Governance. “While there may be a number or factors driving this observation, we believe that proxy advisor and institutional investor commentary may have resulted in changes to benchmarking policies, including a reduction in 75th percentile benchmarking practices.”

Pay Governance continues to monitor trends in CEO pay and the governance environment resulting from SOP, proxy advisor influence and the increasing involvement of institutional shareholders in executive pay issues. Pay Governance’s consulting practice advises public company compensation committees both on setting pay opportunity values based on competitive market data as well as assessing after-the-fact pay-for-performance using realizable pay and other appropriate methodologies.


For more details on this Pay Governance study or to schedule an interview, please call Don Rountree at 770.645.4545.

Pay Governance LLC is an independent consulting firm focused on delivering advisory services to compensation committees. The consultancy also advises the management of companies in situations in which the firm does not serve as the independent committee advisor. Pay Governance has locations throughout the United States in New York, Boston, Detroit, Philadelphia, Pittsburgh, Chicago, St. Louis, Dallas, Cleveland, Charlotte, St. Petersburg, San Francisco and Los Angeles. The firm also has strategic affiliate relationships with Pay Governance Japan and Pay Governance Korea. For more information, visit