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Introduction Methodology Key Findings How Funds Vote Proxy Advisory Voting Recommendations A Look at Specific Votes Conclusion


Overpaid Companies Overpaid Companies by Lowest Votes HIP Investor Regression Analysis Opposition at Mutual Fund Families Opposition at Pension & Other Funds Overpaid CEO Undeperformance Endnotes Acknowledgements & Disclaimer


Are Fund Managers Asleep At The Wheel?



For the past four years As You Sow has issued this report highlighting the 100 most overpaid CEOs among the 500 companies in the S&P500 index. The report’s prime focus is shareholder votes on these pay packages, particularly the votes of large financial managers, mutual funds, and pension funds.

CEO compensation as it is currently structured in the United States does not provoke positive economic outcomes like sustainable company growth. Instead it incentivizes focus on numeric goals that can be easily financially engineered. Many of the metrics that drive CEO pay are short-term and provoke decisions with negative long-term impact; underinvestment in research and development and choices that have long-term negative environmental impact. High CEO pay over-emphasizes the impact of a single individual at a company, rather than rewarding the work of the many company employees. It raises economic inequality to such a level that it becomes increasingly incompatible with a well-functioning economic system.

Manfred F. R. Kets de Vriescalls, of INSEAD -- a graduate business school with campuses in Europe, Asia and the Middle East -- wrote recently that inflated CEO pay is “a sign of impending rot.”

Overpaying the CEO of a company can lead many people to make the false assumption that such compensation is "earned" and justified. It is not. Indeed, the average corporation in its annual proxy statement devotes about ten thousand words to justify those large payments to their CEOs, often rationalizing those large payments by calling them "performance" based and market rate (citing as peers only overpaid CEOs).

Shareholder votes on CEO pay packages provide a critical and underutilized tool for restraining the worst excesses.

This report seeks to identify which financial managers are exercising their fiduciary responsibility and voting against these excessive payments. And conversely, which ones are simply rubber stamping their approval to ever-increasing CEO pay in company after company.



In prior years we employed a methodology using two rankings to identify the 100 most overpaid CEOs. For one ranking we used a regression based on total shareholder return (TSR) conducted by HIP Investor. For the other ranking we combined an aggregated score of 30 problematic pay practices ("red flags"). These two rankings were weighted equally to create a final ranking. Doing this we found a high correlation between the companies on our final list and those that received the highest level of opposition from shareholders voting on these pay packages at the annual meetings.   

This year we focused the report on large asset owner voting and created a simpler methodology that still used two rankings. The first is the same HIP Investor regression we’ve used every year that highlights excess pay based on TSR. The second ranking used the lowest proxy votes for pay packages at S&P 500 companies as a stand-in for the more detailed red flag methodology. These two rankings were weighted 2:1 with the regression analysis being the majority. We also excluded those CEOs whose total disclosed compensation (TDC) was in the lowest third of all S&P 500 CEO pay packages. The full list of the 100 most overpaid CEOs using this methodology is found in Appendix A. The regression analysis of predicted and excess pay performed by HIP Investor is found in Appendix C and its methodology is more fully explained there.

There are three companies – Comcast, ExxonMobil, and Oracle – that have now been on the list every year. An additional five are also repeats from last year: Chesapeake Energy, Citrix, Discovery Communications, Regeneron Pharmaceuticals, and Wynn Resorts.

Rank Company Name CEO at Time of Proxy Vote Total Disclosed Compensation
1ORACLESafra A. Catz / Mark Hurd$82,065,708
2ACTIVISION BLIZZARDRobert A. Kotick$33,065,560
4CHARTER COMMS.CL.AThomas M. Rutledge$98,515,727
5ALPHABET 'A'Sundar Pichai$199,718,200
6WYNN RESORTSStephen Wynn$28,156,985
8REGENERON PHARMS.Leonard S. Schleifer$28,337,520
9DISCOVERY COMMS.'A'David M. Zaslav$37,192,354
10SL GREEN REALTYMarc Holliday$17,326,371
11TWENTY-FIRST CENTURY FOX CL.AJames Murdoch$26,379,673
12WALT DISNEYRobert Iger$43,882,396
13EXXON MOBILRex Tillerson$27,393,567
14WILLIS TOWERS WATSONJohn Haley$28,846,121
15CONOCOPHILLIPSRyan M. Lance$19,212,038
16LENNAR 'A'Stuart Miller$19,225,403
17ESTEE LAUDER COS.'A'Fabrizio Freda$48,369,401
18AFLACDaniel Amos$20,412,010
19MCKESSONJohn H. Hammergren$23,649,638
20CITRIX SYS.Kirill Tatarinov$22,273,969
21HEWLETT PACKARD ENTER.Margaret Whitman$35,564,351
22COMCAST 'A'Brian Roberts$32,963,491
23VERTEX PHARMS.Jeffrey M. Leiden$17,419,758
24TIME WARNERJeffrey L. Bewkes$32,614,304
25CHESAPEAKE ENERGYRobert D. Lawler$15,283,363

Key Findings

This report continues to represent the broadest survey of institutional voting ever done on the topic.

The largest fund managers, in terms of Assets Under Management (AUM), appear to be the most reluctant to vote against compensation packages.
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While both BlackRock and Vanguard have finally begun to speak out on the issue, their votes do not reflect this. The typical mutual fund with $500 billion or more in AUM (there are 19 of them) voted against 12% of the CEO pay packages in the S&P 500, yet Blackrock and Vanguard voted against only 3%.

Large non-US investment managers and pension funds are more likely to vote against CEO pay packages.
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Non-US funds increasingly recognize that CEO compensation at US companies reflects a broken system. Allianz, headquartered in Germany, voted against 79% of the overpaid CEO packages. Natixis a privately-owned asset management holding company based in Paris voted against 46%. PGGM, a leading Dutch pension administrator with $251.6 billion in assets, voted against 97.2% of all CEO pay votes at S&P 500 companies.

Institutional shareholder votes on pay vary considerably, with pension funds far better at exercising fiduciary responsibilities.
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Again, this year we found that pension funds are more likely to vote against overpaid compensation packages than mutual funds. Several voted against more than half of the overpaid CEO pay packages; a few came close to voting against half of the entire S&P 500. On the other side of the spectrum, we also highlight the Pennsylvania State Employee Retirement System which voted to approve every CEO pay package at every company in the S&P 500.

The companies with overpaid CEOs we identified in our first report have markedly underperformed the S&P 500.
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Last year we did an analysis exploring how firms’ stock value has performed since we first identified the CEOs as overpaid. Last year we reported that the 10 companies we identified as having the most overpaid CEOs, in aggregate, underperformed the S&P 500 index by an incredible 10.5 percentage points and actually lost shareholder value with a negative 5.7 percent financial return. The trend held true as we added an additional year’s data. Again, this year, the 10 firms with the most overpaid CEOs, in aggregate, dramatically underperformed the S&P 500 index by an embarrassing 15.6 percentage points.

Most Overpaid CEOs 2017

How do funds vote on the Most Overpaid 100 CEOs?

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votes against
votes for


Financial managers often rely on proxy advisors to evaluate CEO pay packages. The two largest advisors, Institutional Shareholder Services (ISS) and Glass Lewis, compete with several smaller advisors like Egan Jones, Segal Marco, and PIRC.

ISS recommended voting against 10% of the CEO pay packages at S&P 500 companies, and 38 of the 100 most overpaid CEOs.   

Glass Lewis recommended shareholders vote against 14% of CEO pay packages out of all the S&P 500 companies, and 42 of the 100 overpaid CEOs.

Egan-Jones Proxy Services recommended 30% of pay packages at S&P 500 and against 42 of the 100 most overpaid CEOs

Segal Marco Advisors, which provides proxy voting services to multi-employer and public pension funds, recommended shareholders vote against 43% of pay packages at S&P 500 companies 57 of the overpaid CEOs.  

PIRC, one of the largest proxy advisors in Europe recommended votes against at 58% of S&P 500 companies. They recommended voting against 67 of the companies with the lowest votes, and abstained on the remaining 32 in its portfolio.

Despite the very low rate of recommendations by some advisors to vote against CEO pay packages, many mutual funds rejected the advice and voted in favor on at least some occasions. A recent Proxy Insight analysis, “Retaking the Wheel: ISS auto-voters take action to become even more passive” (June 2017)1 studied the ten largest investors by AUM who usually vote in accordance with ISS on most issues. The report analyzed the types of issues where the investors did not follow the ISS recommendation and found that they are more likely to approve pay packages that ISS opposed. They found that “auto-voters are more passive than ISS, overriding the proxy adviser in order to vote with management.”



A number of funds, BlackRock and Vanguard among them, have defended their lack of voting opposition to a philosophical preference for engagement, believing that the most effective way to shift corporate governance is through dialogue.

There is no way to verify whether these negotiations are having a meaningful effect on pay magnitude or specific pay practices and in fact the trends over time suggest they are not. Engagement without   voting in opposition is practically meaningless as the New York Times reporter Gretchen Morgenson reported in her April 15, 2016 piece “BlackRock Wields its Big Stick Like a Wet Noodle on CEO Pay.” The votes are the only real way mutual fund clients and pension fund participants can evaluate how seriously these financial managers take this issue.



Again, this year we have analyzed how the largest investors in S&P 500 companies, namely mutual funds, ETFs, and public pension funds, have voted their shares on this issue. This enables us to see which ones are exercising their fiduciary responsibility and which are acquiescing to management in squandering company resources.

The mutual fund section of the report was based on data provided by Fund Votes, which has been tracking institutional proxy voting for more than 10 years. An explanation of the Unique Vote count methodology they use can be found in Appendix D.

In our first report, four years ago, there were only four large mutual fund groups that voted against 30% of the overpaid packages. Now, two years later, the number of large fund groups that exercise their fiduciary responsibility and vote against 30% of overpaid packages has tripled and stands at 12.

 Figure 2 – Opposition to Overpaid CEO Pay Packages at 25 Large Mutual Funds Ranked by Assets Under Management   Vote data provided by Fund Votes. Assets Under Management (AUM) are from Proxy Insight, and taken from most recent data in ADV forms filed at the SEC

Figure 2 – Opposition to Overpaid CEO Pay Packages at 25 Large Mutual Funds Ranked by Assets Under Management

Vote data provided by Fund Votes. Assets Under Management (AUM) are from Proxy Insight, and taken from most recent data in ADV forms filed at the SEC

However, as can be seen in Figure 3 below, some of the very largest funds have the worst record of voting against pay packages.

 Figure 3 – Funds least likely to oppose overpaid CEO pay packages   Data provided by Fund Votes. See  Appendix D  for a full list as well as an explanation of the methodology used in calculating votes.

Figure 3 – Funds least likely to oppose overpaid CEO pay packages

Data provided by Fund Votes. See Appendix D for a full list as well as an explanation of the methodology used in calculating votes.


However, as can be seen in Figure 4, funds that automatically support compensation packages are now the exception. This year there were 25 funds that voted against more than half of the 100 overpaid CEOs. Several of these are social investment funds.

 Figure 4: Mutual Fund Families Most Likely to Oppose CEO Pay at 100 Most Overpaid Companies   Data provided by Fund Votes

Figure 4: Mutual Fund Families Most Likely to Oppose CEO Pay at 100 Most Overpaid Companies

Data provided by Fund Votes


As can be noted from the table above, non-US fund families have the highest levels of voting against.  

Allianz Global Investors also has a strong record of voting against, as do many other funds who vote from a non-US perspective. In a Financial Times article, Eugenia Unanyants-Jackson, global head of environmental, social, and governance research at Allianz Global Investors said, “When we look at remuneration structures in UK or in some European markets, there is a much closer link between strategy and payouts, compared with US companies. We support variable remuneration, but we think it should only be paid if robust targets are made.”

Natixis, which also appears on this chart with a high level of opposition to these CEO pay packages is a privately-owned asset management holding company based in Paris, France.

As we will see, the same trend of higher opposition when U.S. CEO pay is evaluated by those outside the U.S. is evident with pension funds as well.

Blackrock $5.4 trillion AUM (note: all AUM referenced in this report is based on Proxy Insight most recent disclosure)
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In a recent and much commented on letter to companies, Blackrock CEO Larry Fink wrote, "In managing our index funds, however, BlackRock cannot express its disapproval by selling the company's securities as long as that company remains in the relevant index. As a result, our responsibility to engage and vote is more important than ever. In this sense, index investors are the ultimate long-term investors - providing patient capital for companies to grow and prosper."

Blackrock votes against only 11 of the 100 Overpaid CEO pay packages. Out of the S&P 500 companies Blackrock voted on between 7/1/2016 and 6/30/2017, they opposed only 3.4% of packages and voted in favor at 92.7%according to Proxy Insight data. The prior year they supported 98.3% and opposed 1.7%. From 2014 to 2015, Blackrock cast votes against pay packages at less than 1% of the companies it held in the S&P 500 index. It is good to see improvement, but despite this improvement they are way below their peers.

Vanguard - $3.8 trillion AUM
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Vanguard voted against only 12% of the 100 Overpaid CEO pay packages. Out of the S&P 500 companies itvoted on between 7/1/2016 and 6/30/2017, Vanguard only opposed 3.3% of the packages, while approving 96.5%. The prior year it opposed 1.8 percent.

State Street Global Advisors (SSGA) - $2.5 trillion AUM
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State Street voted against approximately twice as many as Blackrock and Vanguard; voting against 21% of the Overpaid CEO pay packages and 6% of all S&P 500 companies this year.

In May 2016 SSGA had reached out to companies with concerns regarding compensation in a document, entitled, "Guidelines for Mitigating Reputational Risk in C-Suite Pay" noting that "Given the growing income inequality in the country, SSGA sees increased reputational risk arising from the high quantum of pay to C-Suite executives."

Thus the voting record has been much better than BlackRock or Vanguard, but Rakhi Kumar, head of corporate governance at SSGA explained to the Financial Times in early February that approximately 300 of those it voted in favor of received "qualified support." In past seasons, there were times that a concern about structure or lump sum caused discomfort, but didn't rise to the level where SSGA wanted to oppose the pay package in its entirety. This year when the fund has serious reservations instead of voting for such packages it plans to abstain. "It's something typically we supported with a heavy heart," Kumar told the Financial Times, "that will be more transparent now."

BNY Mellon - $1.7 trillion AUM
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Among funds with over $1 trillion in AUM, BNY Mellon had the best voting record. It voted against 48% of the Overpaid CEO pay packages and 27% of CEO pay packages at the S&P 500 companies it holds.

BNY Mellon votes proxies for a number of funds, including Wisdomtree Funds and Lattice Funds. In prior years we listed each fund separately.

Their guidelines appear to be thoughtfully written, likely by someone who understands issues around compensation rather than put together by a committee of people compiling what they understood to be best practices. BNY Mellon warns that it "looks for value creation rather than actions that artificially inflate share price in the short-term."

In terms of pay quantum, "The firm is aware of outsized compensation packages that are not tied to extraordinary innovation, growth or other shareholder benefit."

Dimensional - $414 billion AUM
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Dimensional voted against 57% of the Overpaid CEO pay packages and 18% of CEO pay at all S&P 500 companies this year. Its level of opposition has grown perhaps more than any other fund we cover. In our first report the fund voted against 20% of overpaid CEOs; in our second 46%; in our third 53%. Dimensional's proxy voting guidelines outline five principles used in executive pay evaluation, including avoiding "arrangements that risk 'pay for failure': This principle addresses the appropriateness of long or indefinite contracts, excessive severance packages, and guaranteed compensation."

TIAA - $220.9 billion AUM
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TIAA-CREF stands for Teachers Insurance and Annuity Association - College Retirement Equities Fund. Though the name has changed over the years, its role as a financial service company serving educators remains unchanged.

In 2014 TIAA acquired Nuveen, and in 2017 it took the brand name Nuveen for all asset management business including its 12 investment affiliates. TIAA Investments, however, remains the largest affiliate and makes up 85% of public equity AUM.

TIAA voted against only 3% of CEO pay packages at S&P 500 companies, and 9% of those at Overpaid CEOs.

A spokesperson from Nuveen told us in an email that the "focus of the dedicated group that oversees voting on behalf of TIAA Investments is actually to influence corporations through proactive engagement and discussion with management teams and boards regarding the best practices we like to see adopted by the companies in which we invest."

A few other investment affiliates continue to cast proxy votes, typically following ISS guidelines according to the spokesperson, and the disclosure for those funds (under the name Nuveen) lines up almost exactly with votes 9.6% of all S&P 500 CEO pay votes it cast, and 44% of those at Overpaid CEO companies.



As can be seen from Figure 5, pension funds typically have a higher level of opposition to overpaid CEOs. The opposition level to the overpaid CEOs was more than 50% at 15 of the funds. As with mutual funds, non-US pension funds had the highest levels of opposition. Of the Canadian funds, Alberta Investment Management Corporation (AIMco) and British Columbia Investment Management Corporation (bcIMC) both had opposition levels over 70% on the overpaid CEO packages.

PGGM, a leading Dutch pension administrator with $251.6 billion in assets, voted against 97.2% of all CEO pay votes at S&P 500 companies.

The Northern Ireland Local Government Officers Superannuation Committee (NILGOSC), with $7.3 billion in AUM, held over one fifth of the companies in the S&P 500, and voted against pay at 94% of them.

In addition, several UK pension funds use the voting services from Pensions and Investments Research Consultant (PIRC). Among these are the pension funds are Lancashire County, Suffolk County, Islington Council, North Yorkshire Pension Fund, and others. It is very likely, then, that these funds would have voted against 62% of Overpaid CEO packages.

Norges –AUM $1 trillion
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Norges Bank is the largest sovereign wealth funds (SWF) in the world. SWFs are created with government money, typically from earnings on natural resources (in this case oil). The fund, created by the government of Norway in 1990, has taken some progressive stances on climate and other issues in recent years.

Norges opposed CEO pay packages at only 6% of the companies in the S&P 500. Its voting record stands in stark contrast to those of other European funds.

Norges has become more outspoken regarding concerns about excessive executive compensation and has increased its level of opposition to overpaid CEOs but the increase came from a very low level, closer to 3% The fund prefers dialogue, however, Yngve Slyngstad, the fund’s chief executive, told the Financial Times on February 13, “If there are pay structures that are so far from our view, for instance being so complex that we don’t understand them, we will vote against them.”


Data courtesy of Proxy Insight

As can be noted in the above figure, many pension fund votes settle around the level of opposition of the leading proxy advisors at these companies, 44% and 54% for ISS and Glass Lewis, respectively. This suggests they may simply vote the guidelines directly. The University of California is not listed above because we were unable to get their records, but follows ISS’s recommendations. However, more and more public pension funds are showing keener analysis and voting against companies even where the advisors recommend in favor.  


Florida State Pension Fund – AUM $191.5 billion
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One pension fund that stands out is the Florida State Pension Fund. This fund which is administered by the Florida State Board of Administration (SBA), voted against 41% of CEO pay packages of the S&P 500 companies; they voted against 73% of the 100 Overpaid CEO pay packages.

Some of the language in the SBA guidelines is similar to that of other investors; calling for proper alignment of pay and performance, better disclosure and so forth. But the SBA sets the tone for voting in its guidelines: “SBA look for reasonable compensation levels, both on an absolute basis and relative to peers.” The fund notes that “high compensation levels on absolute or peer-relative basis” may cause a vote against a compensation plan.

The fund lists approximately 20 other practices or concerns that may result in a vote against and advisory pay vote, providing a fair level of specificity. For example, it notes that “poor disclosure of performance metrics, thresholds and targets” may result in a vote against, rather than simply listing generic “poor disclosure” as a concern.

The SBA is one of the funds that discloses the rationale for its voting on its website, where that data is collected by Proxy Insight. Using that data, we were able to investigate a sampling of its votes. The rationale we found that was used most often was that a company “received a grade lower than a C in the Pay for Performance model.” (This was the rationale for votes against Bed, Bath & Beyond, ConocoPhillips, Freeport, Mylan, and SL Green Realty among others).

Los Angeles County Employees Retirement Association (LACERA) – $45.9 billion AUM
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Of the public pension funds, LACERA is one that has shown the most improvement since last year. It went from voting less than 7% of S&P 500 companies last year to more than 10% of S&P 500 companies in its portfolio this year.

The fund voted against 10.3% of pay packages of the S&P 500 companies; they voted against 35% of the 100 Overpaid CEO pay packages.

New York City Funds - $192 billion AUM
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There are a number of New York City Funds that together, under the Bureau of Asset Management at the Office of the Comptroller Scott Stringer, have a division called the Corporate Governance and Responsible Investment that casts votes and leads governance initiatives.

The fund voted against 26% of pay packages of the S&P 500 companies and against 67% of the 100 Overpaid CEO pay packages.

In spring 2017 it helped lead the most powerful vote-no-on-compensation campaign of the year at Mylan. The New York City Pension Funds have been attempting reform for over five years, filing well-supported proposals that called for an independent chair at meetings in 2012, 2013, and 2014. In 2017 – amid a public and regulatory backlash for the price‐hiking controversy involving Mylan’s EpiPen – the New York City Funds joined by CalSTRS, the New York State Comptroller, and Dutch pension fund PGGM filed an exempt solicitation urging shareholders to vote against six directors as well as the CEO pay package. As the funds’ 2017 Shareowner Initiatives report notes, “In a stinging rebuke to the board, Mylan shareowners subsequently cast an extraordinary 83.5 percent of their votes cast against executive pay and majority or near majority votes (from 29 to 56 percent) against the six directors.”

California Public Employees’ Retirement System (CalPERS) AUM $323.5 billion
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The fund, which manages pension and health benefits for more than 1.6 million California public employees, retirees, and their families, has long been a corporate governance leader.

CalPERS voted against 16.5% of pay packages of the S&P 500 companies; they voted against 53% of the 100 Overpaid CEO pay packages. CalPERS opposition level to pay packages has been increasing at a slow by steady rate since 2012, when they opposed only 6% of pay packages.

California State Teachers' Retirement System (CalSTRS) - AUM $221.7 billion
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CalSTRS, the largest teacher retirement fund in the United States provides retirement and other benefits for nearly 1,000,000 California educators.

The fund voted against 17% of pay packages of the S&P 500 companies; they voted against 61% of the 100 Overpaid CEO pay packages.

Amalgamated Bank - AUM $17.8 billion
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The Amalgamated bank was founded by the Amalgamated Clothing Workers of America in 1923. In 1992 the Amalgamated Bank introduced its LongView Equity Index Fund, which provides union pension funds with investment products and actively advocates for enhanced shareholder value.

Amalgamated Bank voted against packages at 43% of pay packages at S&P 500 companies and 57% of the overpaid CEO packages.

Pennsylvania State Employee Retirement System - AUM $28.9 billion
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One public pension fund, Pennsylvania State Employee Retirement System voted in favor of every single CEO pay package in its portfolio. This makes it an extraordinary outlier, and it makes no pretentions of engagement. Emails reaching out to the fund were not returned. This record does not seem to be explained by the guidelines that state that, “If a management ’say-on-pay’ proposal is on the ballot, SERS will use this as the primary focus of voting on executive compensation practices’ but may also vote against compensation committee members.”

The 100% support means that it voted in favor of the pay package at Mylan, making it the only public fund that supported it. This vote is also in contrast to voting patterns of other funds in the same state, including Pennsylvania Public School Employees Retirement System, which voted against 17% of the Overpaid CEOs packages.


A Look at Specific Votes

This year for the first time in the report we are including a table that allows readers to view results from specific votes at particular companies. On the list we included a number of examples of prominent companies with evidence of overpay or problematic practices.

We did not include votes at several companies where all advisors recommended against: Alphabet, Chesapeake, Mylan, Oracle, and SLGreen. 

  Figure 6: Proxy Advisor Recommendations at Select Companies

Figure 6: Proxy Advisor Recommendations at Select Companies

General Electric’s compensation package serves as one example. It was supported by 89.2% of investors. Since that vote, the company revealed that the SEC is investigating accounting charges the company took following vastly under estimating the costs of long-term care and other policies. By February 2, 2018 the stock was down 40% from one year earlier. Well before this broke, several investors – primarily large pension funds -- had various concerns about compensation and voted against the advisory vote.

The largest investor in GE that voted against the CEO pay package was its 4th largest shareholder, Capital World/American Investors.

In some cases, the rationales against the vote are made available. Funds voting against GE’s compensation listed as their rationale such reasons as:

  • Does not sufficiently align pay with performance, as it lacks disclosure and as there are features that are not in line with best practices (British Columbia Investment Management)
  • The remuneration committee should not allow vesting of incentive awards for below median performance (BMO Global)
  • The short-term incentive plan allows for positive discretionary adjustments to payout and this discretion was exercised. The long-term incentive program thresholds and maximums are not sufficiently disclosed (NEI Investment)
  • The CEO's total compensation is greater than 150 times national median household income. The CEO's total compensation is greater than the median of its direct peers. (Trillium Asset Management)

The State of Wisconsin, however, voted in favor of the proposal with “qualified support.” In addition to raising concerns about perquisites and disclosure, the fund added, “There is a discretionary component to the short-term incentive program. A discretionary bonus was paid in the previous year.”

The chart of mutual funds below, however, shows that while some large funds voted against these excessive packages, there were some who voted for the majority.

  Figure 7: Mutual Fund Votes at Select Companies

Figure 7: Mutual Fund Votes at Select Companies

As can be seen from the following chart, Pension Funds were more likely to vote against Overpaid CEO pay packages than were the mutual funds.

  Figure 8: Pension Fund Votes at Select Companies

Figure 8: Pension Fund Votes at Select Companies



The Dodd-Frank Financial Reform Act gives shareholders the right to cast an advisory vote (Say-on-Pay) on CEO pay packages. Institutional investors, having the fiduciary responsibility to represent asset owners and pension beneficiaries need to use this right to make a statement that the system is out of balance and they want change. In addition, those who own mutual funds through 401(k)s and other investment vehicles must hold fund managers accountable and insist that representatives also exercise this responsibility rigorously. The waste of corporate resources impacts not only the company but polarizes society at large with far reaching implications on the economy. Shareholders have the tools to have their voices heard. Now they need to use them.


A– Overpaid Companies

Rank Name CEO Pay Excess Vote
1ORACLESafra A. Catz / Mark Hurd 82,065,708.00 64,769,67145%
2ACTIVISION BLIZZARDRobert A. Kotick 33,065,560.00 20,476,78560%
3JOHNSON CONTROLS INTERNATIONAL PLCAlex Molinaroli 46,396,770.00 28,284,21864%
4CHARTER COMMSThomas M. Rutledge 98,515,727.00 81,707,82470%
5ALPHABET Sundar Pichai 199,718,200.00 183,468,21475%
6WYNN RESORTSStephen Wynn 28,156,985.00 14,170,09459%
7INTERNATIONAL BUSINESS MACHINESVirginia Rometty 32,695,699.00 13,675,05354%
8REGENERON PHARMS.Leonard S. Schleifer 28,337,520.00 16,898,83067%
9DISCOVERY COMMUNICATIONSDavid M. Zaslav 37,192,354.00 25,742,20669%
10SL GREEN REALTYMarc Holliday 17,326,371.00 9,303,75843%
11TWENTY-FIRST CENTURY FOX CL.AJames Murdoch 26,379,673.00 12,647,98169%
12WALT DISNEYRobert Iger 43,882,396.00 25,848,08384%
13EXXON MOBILRex Tillerson 27,393,567.00 11,500,34669%
14WILLIS TOWERS WATSONJohn Haley 28,846,121.00 13,871,47686%
15CONOCOPHILLIPSRyan M. Lance 19,212,038.00 6,540,19932%
16LENNARStuart Miller 19,225,403.00 7,262,78667%
17ESTEE LAUDER COSFabrizio Freda 48,369,401.00 33,142,03192%
18AFLACDaniel Amos 20,412,010.00 8,013,82981%
19MCKESSONJohn H. Hammergren 23,649,638.00 7,434,92981%
20CITRIX SYS.Kirill Tatarinov 22,273,969.00 10,158,15586%
21HEWLETT PACKARD ENTER.Margaret Whitman 35,564,351.00 8,627,59384%
22COMCASTBrian Roberts 32,963,491.00 15,275,53891%
23VERTEX PHARMS.Jeffrey M. Leiden 17,419,758.00 7,943,03583%
24TIME WARNERJeffrey L. Bewkes 32,614,304.00 18,395,85493%
25CHESAPEAKE ENERGYRobert D. Lawler 15,283,363.00 5,536,61257%
26BLACKROCKLaurence D. Fink 25,472,831.00 12,514,50390%
27INTUITBrad Smith 18,788,385.00 6,763,32584%
28AT&TRandall Stephenson 28,433,716.00 9,957,65291%
29ALTRIA GROUPMartin J. Barrington 27,573,566.00 15,484,05893%
30FISERVJeffery W. Yabuki 21,241,782.00 7,138,84385%
31DOW CHEMICALAndrew N. Liveris 22,963,059.00 7,291,14188%
32ADV.AUTO PARTSThomas R. Greco 22,820,767.00 6,720,72586%
33ALEXANDRIA REAL ESTATE EQUITIES INCJoel Marcus 11,307,499.00 5,715,25882%
34CENTENEMichael F. Neidorff 21,968,983.00 7,167,39789%
35ANADARKO PETROLEUMR. A. Walker 18,650,252.00 8,109,96391%
36AFFILIATED MANAGERSSean M. Healey 14,732,572.00 4,160,23562%
37HPDion Weisler 28,696,267.00 13,302,98793%
38NEWELL BRANDSMichael B. Polk 21,684,542.00 5,996,43986%
39NEWMONT MININGGary J. Goldberg 16,590,094.00 4,124,59767%
40MACERICHArthur M. Coppola 13,537,911.00 6,006,55389%
41OMNICOM GROUPJohn D. Wren 25,979,039.00 9,730,96193%
42FIDELITY NAT.INFO.SVS.Gary A. Norcross 20,020,448.00 4,336,86383%
43JP MORGAN CHASE & CO.James Dimon 27,236,892.00 8,707,63493%
44MASTERCARDAjay S. Banga 16,892,056.00 4,091,73379%
45LEUCADIA NATIONALRichard B. Handler 17,583,374.00 4,857,95188%
46PRUDENTIAL FINL.John Strangfeld 24,444,255.00 8,965,03893%
47AMERIPRISE FINL.James Cracchiolo 16,610,175.00 3,660,00481%
48MORGAN STANLEYJames P. Gorman 21,205,835.00 5,448,31990%
49CHEVRONJohn S. Watson 24,657,491.00 9,221,16694%
50PEPSICOIndra Nooyi 29,783,416.00 11,243,10794%
51PIONEER NTRL.RES.Scott Douglas Sheffield 15,003,350.00 4,622,03190%
52RANGE RES.Jeffrey L. Ventura 9,862,925.00 2,843,45969%
53PHILLIPS 66Greg Garland 25,055,294.00 11,849,96594%
54INVESCOMartin Flanagan 14,607,055.00 3,024,28880%
55HALLIBURTONDavid J. Lesar 17,846,913.00 2,511,09566%
56PROLOGISHamid R. Moghadam 15,539,777.00 6,740,63894%
57VALERO ENERGYJoseph W. Gorder 18,452,618.00 5,916,57193%
58JOHNSON & JOHNSONAlex Gorsky 26,871,720.00 9,670,93195%
59FREEPORT-MCMORANRichard Adkerson 15,982,666.00 1,975,51553%
60GOLDMAN SACHS GP.Lloyd Blankfein 20,206,898.00 5,445,65393%
61E*TRADE FINANCIALPaul T. Idzik 15,484,310.00 4,779,20593%
62AETNAMark T. Bertolini 18,662,306.00 3,032,28985%
63PULTE GROUPRichard Dugas 20,495,607.00 9,547,23095%
64BED BATH & BEYONDSteven H. Temares 16,946,399.00 1,427,27544%
65AMERICAN EXPRESSKenneth Chenault 17,463,639.00 1,910,63473%
66SOUTHERNThomas A. Fanning 15,829,652.00 1,403,39461%
67VIACOM Thomas Dooley 27,931,458.00 15,984,21296%
68THERMO FISHER SCIENTIFICMarc N. Casper 17,800,661.00 2,036,97783%
69MONSTER BEVERAGERodney Cyril Sacks 12,028,955.00 2,189,14585%
70GENERAL ELECTRICJeffrey Immelt 21,324,524.00 2,637,68789%
71PENTAIRRandall J. Hogan 15,583,493.00 1,435,23576%
72SIMON PROPERTY GROUPDavid Simon 13,238,074.00 2,335,70288%
73EBAYDevin N. Wenig 15,941,192.00 3,158,60893%
74FIRSTENERGYCharles E. Jones 14,117,391.00 1,193,40872%
75NETFLIXReed Hastings 23,194,567.00 11,491,30096%
76XL GROUPMichael S. McGavick 12,653,175.00 832,02368%
77CHUBBEvan G. Greenberg 24,419,486.00 12,540,53296%
78COCA COLAMuhtar Kent 17,551,944.00 950,95175%
79HONEYWELL INTL.David Cote 21,261,501.00 3,938,64594%
80ABBVIERichard Gonzalez 20,970,924.00 7,016,75595%
81BOSTON PROPERTIESOwen D. Thomas 10,002,021.00 2,648,83193%
82ROPER TECHNOLOGIESBrian D. Jellison 26,316,166.00 13,247,72396%
83RALPH LAUREN Stefan Larsson 16,196,875.00 2,593,06393%
84TJXErnie Herrman 18,536,866.00 234,40258%
85OCCIDENTAL PTL.Vicki A. Hollub 12,998,495.00 709,73283%
86ADOBE SYSTEMSShantanu Narayen 20,035,334.00 6,565,06096%
87MERCK & COMPANYKenneth C. Frazier 21,781,170.00 5,826,92295%
88TRANSDIGM GROUPW. Nicholas Howley 18,650,700.00 6,286,98196%
89CVS HEALTHLarry J. Merlo 18,359,377.00 -74,62961%
90CABOT OIL & GAS Dan Dinges 11,311,837.00 4,510,78095%
91TESOROGregory J. Goff 18,179,689.00 6,461,93596%
92EXELONChristopher Crane 15,231,701.00 695,84687%
93LOCKHEED MARTINMarillyn Hewson 20,573,733.00 3,702,14095%
94ARCONIC INC.Klaus Kleinfeld 16,805,788.00 1,905,72893%
95PINNACLE WEST CAP.Donald E. Brandt 11,359,227.00 -121,64871%
96MONDELEZ INTERNATIONAL CL.AIrene B. Rosenfeld 16,742,076.00 247,03885%
97PPLWilliam H. Spence 15,507,259.00 2,726,26794%
98MARATHON PETROLEUMGary Heminger 16,555,808.00 1,287,28393%
99WELLTOWERThomas DeRosa 13,734,354.00 7,265,31696%
100ABBOTT LABORATORIESMiles White 20,285,591.00 4,153,80596%

B– Overpaid Companies by Lowest Votes

The table shows the 100 CEOs whose pay packages received the lowest votes. Vote data from Fund Votes; Compensation data from ISS

Rank Company CEO Support for CEO Pay Votes TDC
1MYLANHeather Bresch17%$13,776,693
2CONOCOPHILLIPSRyan M. Lance32%$19,212,038
3SL GREEN REALTYMarc Holliday43%$17,326,371
4BED BATH & BEYONDSteven H. Temares44%$19,409,668
5ORACLESafra A. Catz45%$82,065,708
6FREEPORT-MCMORANRichard Adkerson53%$15,982,666
7IBMVirginia Rometty54%$32,695,699
8CHESAPEAKE ENERGYRobert D. Lawler57%$15,283,363
9TJXErnie Herrman58%$18,536,866
10WYNN RESORTSStephen Wynn59%$28,156,985
11ACTIVISION BLIZZARDRobert A. Kotick60%$33,065,560
12SOUTHERNThomas A. Fanning61%$15,829,652
13CVS HEALTHLarry J. Merlo61%$18,359,377
14AFFILIATED MANAGERSSean M. Healey62%$14,732,572
15FMCPIERRE BRONDEAU62%$10,116,377
16KANSAS CITY SOUTHERNPatrick J. Ottensmeyer62%$5,873,554
18HALLIBURTONDavid J. Lesar66%$17,846,913
19REGENERON PHARMACEUTICALSLeonard S. Schleifer67%$28,337,520
20NEWMONT MININGGary J. Goldberg67%$16,590,094
21LENNARStuart Miller67%$19,225,403
22UNION PACIFICLance M. Fritz68%$11,643,137
23XL GROUPMichael S. McGavick68%$12,653,175
24EXXON MOBILRex Tillerson69%$27,393,567
25RYDER SYSTEMRobert E. Sanchez69%$5,105,686
26RANGE RESOURCESJeffrey L. Ventura69%$9,862,925
27TWENTY-FIRST CENTURY FOXJames Murdoch69%$26,379,673
28DISCOVERY COMMUNICATIONSDavid M. Zaslav69%$37,192,354
29VERISK ANALYTICSScott G. Stephenson69%$6,927,202
30CHARTER COMMUNICATIONSThomas M. Rutledge70%$98,515,727
31PINNACLE WEST CAPITALDonald E. Brandt71%$11,359,227
32FIRSTENERGYCharles E. Jones72%$14,117,391
33AMERICAN EXPRESSKenneth Chenault73%$17,463,639
34E I DU PONT DE NEMOURSEdward D. Breen74%$11,006,644
35JUNIPER NETWORKSRami Rahim75%$7,544,013
36COCA COLAMuhtar Kent75%$17,551,944
37US BANCORPRichard Davis75%$15,345,994
38ALPHABETSundar Pichai75%$199,718,200
39PENTAIRRandall J. Hogan76%$15,583,493
40EXPEDIADara Khosrowshahi79%$2,448,688
41MASTERCARDAjay S. Banga79%$16,892,056
42PRAXAIRStephen Angel79%$13,037,062
43INVESCOMartin Flanagan80%$14,607,055
44MCKESSONJohn H. Hammergren81%$23,649,638
45WYNDHAM WORLDWIDEStephen P. Holmes81%$10,535,048
46AMERIPRISE FINANCIALJames Cracchiolo81%$16,610,175
47AFLACDaniel Amos81%$20,412,010
50OCCIDENTAL PETROLEUMVicki A. Hollub83%$12,998,495
51THERMO FISHER SCIENTIFICMarc N. Casper83%$17,800,661
52WAL MART STORESC. Douglas McMillon83%$22,352,143
53VERTEX PHARMACEUTICALSJeffrey M. Leiden83%$17,419,758
54DUKE ENERGYLynn Good84%$13,793,594
55WHOLE FOODS MARKETJohn Mackey84%$1,262,379
56HEWLETT PACKARD ENTERPRISESMargaret Whitman84%$35,564,351
57WALT DISNEYRobert Iger84%$43,882,396
58INTUITBrad Smith84%$18,788,385
59AKAMAI TECHNOLOGIESF. Thomson Leighton84%$6,258,770
60AMERICAN ELECTRIC POWERNicholas Akins85%$11,472,740
61UNITED DOMINION REALTY TRUSTThomas W. Toomey85%$5,930,700
62MONSTER BEVERAGERodney Cyril Sacks85%$12,028,955
63MONDELEZ INTERNATIONALIrene B. Rosenfeld85%$16,742,076
64AETNAMark T. Bertolini85%$18,662,306
65MICROCHIP TECHNOLOGYSteve Sanghi85%$7,305,351
66FISERVJeffery W. Yabuki85%$21,241,782
67WILLIS TOWERS WATSONDominic Casserley86%$44,276,460
68NEWELL BRANDSMichael B. Polk86%$21,684,542
69NIKEMark G. Parker86%$13,851,499
70ADV.AUTO PARTSThomas R. Greco86%$22,820,767
71CITRIX SYSTEMSKirill Tatarinov86%$22,273,969
72METLIFESteven A. Kandarian86%$15,281,939
73WATERSChristopher O'Connell86%$7,631,015
74EXELONChristopher Crane87%$15,231,701
75CENTURYLINKGlen F. Post III88%$13,966,214
76LEUCADIA NATIONALRichard B. Handler88%$17,583,374
77CARMAXWilliam D. Nash88%$6,538,392
78DOW CHEMICALAndrew N. Liveris88%$22,963,059
79SIMON PROPERTY GROUPDavid Simon88%$13,238,074
80MACERICHArthur M. Coppola89%$13,537,911
81CENTENEMichael F. Neidorff89%$21,968,983
82F5 NETWORKSJohn McAdam89%$4,792,978
83MICHAEL KORS HOLDINGSJohn D. Idol89%$8,590,295
84CARNIVALArnold W. Donald89%$9,881,820
85GENERAL ELECTRICJeffrey Immelt89%$21,324,524
86EVERSOURCE ENERGYJames J. Judge89%$6,183,262
87C R BARDTimothy Ring89%$12,626,500
89DR PEPPER SNAPPLE GROUPLarry Young90%$9,931,630
90YUM! BRANDSGreg Creed90%$15,380,682
91NEWSRobert J. Thomson90%$11,336,883
92BLACKROCKLaurence D. Fink90%$25,472,831
93PIONEER NATURAL RESOURCESScott Douglas Sheffield90%$15,003,350
94MORGAN STANLEYJames P. Gorman90%$21,205,835
95LOEWSJames S. Tisch90%$5,993,409
96EQUITY RESIDENTIAL REITDavid J. Neithercut90%$8,673,704
97CH ROBINSON WORLDWIDEJohn P. Wiehoff91%$6,321,399
98AT&TRandall Stephenson91%$28,433,716
99COMCASTBrian Roberts91%$32,963,491
100ANADARKO PETROLEUMR. A. Walker91%$18,650,252


This table shows the 100 Most Overpaid, as calculated by just the HIP Investor regression analysis.

Although we, like many other analysts, find weak links between pay and performance, the usual justification claimed for high executive pay is that they are connected to profits and capital appreciation for the shareholders. We grant the assumption that pay should be determined by performance, and then use a basic statistical technique to map actual performance outcomes to predicted levels of pay. This prediction is compared to actual pay, to see how much the package exceeded such a prediction. Those with highest excess are ranked in the table below.

Executive pay data series included:

• Raw data: Simply looking at every ISS-identified executive’s pay package, in each year, as a single data point to be paired with performance for that year.

• CEO Pay, all years: The raw data is filtered based on ISS identification of the CEO, we adjusted Alphabet manually to make sure the CEO of Google (Sundar Pichai) is listed instead of Larry Page the CEO of Alphabet who only gets nominal pay. The series is supplemented using a Thomson Reuters Asset4 data set that captures the single largest pay package for each (company, year) pair. If ISS did not report a CEO for a given pair, and that pair was available in the Asset4 series, the Asset4 data was included. Where ISS identifies multiple co-CEOs, their pay packages are added together. Once the full set of pay packages is assembled, each (company, year) value is paired with the performance for that year, and this full set is used for the regression.

• CEO Pay, most recent available: Rather than using all (company, year) pairs, only the most recent available CEO pay package is used, along with performance trailing from that year.

• Summed: Aggregating all money paid out to ISS-identified executives for the year.

• Averaged: Dividing the previous summed data point by the number of distinct executives for the year.

Each type of executive pay could be reported in any year from 2007-2017, though not every company was reported for every year.

Financial performance series included:

• Return On Invested Capital (cash flow available to pay both debt and equity capital owners, adjusted for tax effects, divided by the total value of that capital). ROIC is sourced from Thomson Reuters WorldScope, which sources data from companies’ annual reports and investor filings.

• Total Return (capital gains and dividends) on the company’s primary equity. This is calculated from the ThomsonReuters DataStream Return Index series, using trailing periods behind June 30 of the year of the pay package as identified by ISS (or matching the year for the supplementary largest package data from Asset4). Both performance factors were calculated across one-year, three-year, and five-year windows, trailing behind each possible pay year.

Rank Name Regression Prediction CEO Pay Value Excess relative to Regression Excess relative to Regression %
1ALPHABET $16,249,986$199,718,200$183,468,2141129%
2CHARTER COMMUNICATIONS$16,807,903$98,515,727$81,707,824486%
4CBS $13,788,369$69,550,657$55,762,288404%
5ESTEE LAUDER COSMETICS$15,227,370$48,369,401$33,142,031218%
6JOHNSON CONTROLS INTERNATIONAL PLC$18,112,552$46,396,770$28,284,218156%
7WALT DISNEY$18,034,313$43,882,396$25,848,083143%
8DISCOVERY COMMSUNICATIONS$11,450,148$37,192,354$25,742,206225%
9ACTIVISION BLIZZARD$12,588,775$33,065,560$20,476,785163%
10SCRIPPS NETWORKS INTACT. $10,275,022$28,784,239$18,509,217180%
11TIME WARNER$14,218,450$32,614,304$18,395,854129%
12REGENERON PHARMS.$11,438,690$28,337,520$16,898,830148%
13VIACOM $11,947,246$27,931,458$15,984,212134%
14ALTRIA GROUP$12,089,508$27,573,566$15,484,058128%
15COMCAST $17,687,953$32,963,491$15,275,53886%
16WYNN RESORTS$13,986,891$28,156,985$14,170,094101%
17WILLIS TOWERS WATSON$14,974,645$28,846,121$13,871,47693%
18INTERNATIONAL BUSINESS MACHINES$19,020,646$32,695,699$13,675,05372%
20ROPER TECHNOLOGIES$13,068,443$26,316,166$13,247,723101%
21TWENTY-FIRST CENTURY FOX CL.A$13,731,692$26,379,673$12,647,98192%
24PHILLIPS 66$13,205,329$25,055,294$11,849,96590%
25EXXON MOBIL$15,893,221$27,393,567$11,500,34672%
28CITRIX SYS.$12,115,814$22,273,969$10,158,15584%
30OMNICOM GROUP$16,248,078$25,979,039$9,730,96160%
31JOHNSON & JOHNSON$17,200,789$26,871,720$9,670,93156%
33SL GREEN REALTY$8,022,613$17,326,371$9,303,758116%
35PRUDENTIAL FINL.$15,479,217$24,444,255$8,965,03858%
36JP MORGAN CHASE & CO.$18,529,258$27,236,892$8,707,63447%
37HEWLETT PACKARD ENTER.$26,936,758$35,564,351$8,627,59332%
38ANADARKO PETROLEUM$10,540,289$18,650,252$8,109,96377%
40VERTEX PHARMS.$9,476,723$17,419,758$7,943,03584%
42ELECTRONIC ARTS$12,635,474$19,972,718$7,337,24458%
43DOW CHEMICAL$15,671,918$22,963,059$7,291,14147%
45LENNAR $11,962,617$19,225,403$7,262,78661%
51ADV.AUTO PARTS$16,100,042$22,820,767$6,720,72542%
52ADOBE SYSTEMS$13,470,274$20,035,334$6,565,06049%
55TRANSDIGM GROUP$12,363,719$18,650,700$6,286,98151%
56APPLIED MATS.$13,554,651$19,680,422$6,125,77145%
57CHARLES SCHWAB$13,449,214$19,547,649$6,098,43545%
59NEWELL BRANDS$15,688,103$21,684,542$5,996,43938%
61VALERO ENERGY$12,536,047$18,452,618$5,916,57147%
62MERCK & COMPANY$15,954,248$21,781,170$5,826,92237%
63ALEXANDRIA REAL ESTATE EQUITIES INC$5,592,241$11,307,499$5,715,258102%
64CIMAREX EN.$7,643,090$13,180,919$5,537,82972%
65CHESAPEAKE ENERGY$9,746,751$15,283,363$5,536,61257%
66SEMPRA EN.$13,287,014$18,806,408$5,519,39442%
67PAYPAL HOLDINGS$13,479,931$18,934,341$5,454,41040%
68MORGAN STANLEY$15,757,516$21,205,835$5,448,31935%
69GOLDMAN SACHS GP.$14,761,245$20,206,898$5,445,65337%
70KIMCO REALTY$3,798,167$9,039,830$5,241,663138%
71LEUCADIA NATIONAL$12,725,423$17,583,374$4,857,95138%
72E*TRADE FINANCIAL$10,705,105$15,484,310$4,779,20545%
73PIONEER NTRL.RES.$10,381,319$15,003,350$4,622,03145%
74CABOT OIL & GAS $6,801,057$11,311,837$4,510,78066%
75GENERAL DYNAMICS$16,867,071$21,358,077$4,491,00627%
76RAYTHEON $16,003,176$20,460,796$4,457,62028%
78FIDELITY NAT.INFO.SVS.$15,683,585$20,020,448$4,336,86328%
79GENERAL MOTORS$18,262,652$22,582,059$4,319,40724%
80REALTY INCOME$4,080,348$8,340,041$4,259,693104%
81FORD MOTOR$17,939,893$22,102,498$4,162,60523%
82AFFILIATED MANAGERS$10,572,337$14,732,572$4,160,23539%
83ABBOTT LABORATORIES$16,131,786$20,285,591$4,153,80526%
84NEWMONT MINING$12,465,497$16,590,094$4,124,59733%
87HONEYWELL INTL.$17,322,856$21,261,501$3,938,64523%
88LEVEL 3 COMMS.$12,880,789$16,739,111$3,858,32230%
89GENERAL GW.PROPS.$9,006,895$12,748,988$3,742,09342%
90FEDERAL REALTY INV.TST.$5,760,180$9,496,740$3,736,56065%
91GOODYEAR TIRE & RUB.$16,069,203$19,798,104$3,728,90123%
92LOCKHEED MARTIN$16,871,593$20,573,733$3,702,14022%
93AMERIPRISE FINL.$12,950,171$16,610,175$3,660,00428%
94NEXTERA ENERGY$13,134,452$16,758,771$3,624,31928%
95BANK OF NEW YORK MELLON$15,554,258$19,165,598$3,611,34023%
96NORTHROP GRUMMAN$16,231,995$19,841,841$3,609,84622%
97INCYTE CORP$8,296,266$11,807,113$3,510,84742%
98UNIVERSAL HEALTH SVS.$16,441,138$19,867,748$3,426,61021%
100VISA $13,162,715$16,442,340$3,279,62525%

D – Opposition for Say-on-Pay Resolutions at Mutual Fund Families

This table summarizes over 100 mutual fund families on their CEO pay votes at all S&P 500 companies and the 100 companies with the most overpaid CEOs.

In order not to overweight votes on securities held more widely across a fund family compared to those held by only a few funds, each vote is recorded only once across a fund family. The ‘effective unique vote’ with respect to a specific resolution is the vote cast by at least 75% of funds across the entire fund family. In most instances, all funds across a fund family will vote identically. The 75% threshold is applied in cases where one or more funds within a family of funds vote inconsistently. Fund Votes’ Jackie Cook believes that the effective unique vote count method provides the most accurate method of analyzing a fund group’s position.

Where the 75% consensus threshold is not met, a ‘Mixed Vote’ is assigned and not counted as contributing to that fund’s overall level of support for Say-on-Pay resolutions included in the survey.

Fund Family AUM Votes Against Lowest 100 Votes Against S&P 500
BNY MELLON170048%27%
CCA FUNDS0.128%9%
ICON FUNDS2.439%13%
JP MORGAN190023%6%
LEGG MASON239.929%7%
LORD ABBETT167.210%3%
MERCER FUNDS0.47728%9%
OLD WESTBURY29.934%12%
T ROWE81227%8%
TRILLIUM (PORTFOLIO 21)2.2100%100%
Ultimus Fund SolutionsNA17%4%
VALUE LINE2.550%17%
WADDELL & REED80.50%0%
WELLS FARGO409.736%10%
WISDOMTREE (BNY Mellon)170048%27%


Data provided by ProxyInsight. Analysis by Jackie Cook

Fund AUM Percentage Against 100 Lowest Percent Against S & P 500
Pennsylvania State Employees' Retirement System (SERS)$28.9 bn0%0%
TIAA-CREF Asset Management LLC$220.9 bn9%3%
Indiana Public Retirement System (Multi-Managed)$32.0 bn44%4%
Norges951 bnN/A6%
Employees Retirement System of Texas$25.6 bn34%9%
State Teachers' Retirement System of Ohio$69.6 bn35%9%
Teacher Retirement System of Texas$125.3 bn33%9%
Maryland State Retirement and Pension System$43.7 bn35%9%
Illinois Municipal Retirement Fund$33.4 bn33%10%
Virginia Retirement System$67.8 bn75%10%
University of California$110 bn38%10%
Los Angeles County Employees Retirement Association (LACERA)$45.9 bn35%10%
North Carolina Department of State Treasurer$89.8 bn38%11%
Oregon Investment Council$95.3 bn41%12%
Pennsylvania Public School Employees' Retirement System (PSERS)$47.6 bn33%12%
Caisse de dépôt et placement du Québec$208.0 bn49%12%
Los Angeles Fire & Police Pensions$18.1 bn41%12%
United Church Funds$0.8 bn42%12%
State Universities Retirement System of Illinois (SURS)$18.0 bn41%12%
Colorado Pension (PERA)$44.0 bn40%12%
Illinois State Board of Investment$15.4 bn41%13%
Washington State Investment Board (WSIB)$116.5 bn36%13%
Tennessee Consolidated Retirement System (TCRS)$32.0 bn41%14%
Ontario Teachers' Pension Plan (OTPP)$141.7 bn37%14%
California Public Employees' Retirement System (CalPERS)$323.5 bn53%17%
California State Teachers' Retirement System (CalSTRS)$221.7 bn54%17%
Colorado Fire & Police Pension Association (FPPA)$2.2 bn51%22%
The New York State Common Retirement Fund$192.4 bn56%22%
Massachusetts Pension Reserves Investment Management (PRIM)$66.8 bn53%22%
State of Wisconsin Investment Board (SWIB)$99.1 bn63%25%
New York City Pension Funds$158.0 bn67%26%
Ohio Public Employees Retirement System (OPERS)$86.3 bn61%27%
British Columbia Investment Management Corporation (bcIMC)$101.7 bn71%38%
Florida State Board of Administration $191.5 bn73%41%
Amalgamated Bank17.8 bn57%43%
Minnesota State Board of Investment$89.5 bn99%63%
Alberta Investment Management Corporation (AIMco)$95.7 bn71%65%
Northern Ireland Local Government Officers Superannuation Committee (NILGOSC)$7.3 bnN/A94%
PGGM$251.6 bnN/A97%


By HIP Investor (Onindo Khan and R.Paul Herman)

  Figure 1:  OVERPAID CEOs UNDERPERFORM FINANCIALLY  Total Shareholder Return (TSR), annualized 3 years (2012-15; 2015-18)

Total Shareholder Return (TSR), annualized 3 years (2012-15; 2015-18)

Large companies continue to boost CEO pay, to levels that are 300x the average worker.  The most overpaid CEOs collect more than 1000 times the average worker pay.  While defenders of high CEO pay contend that the rewards are for increased shareholder value, the truth is clear:  shareholders of companies with most overpaid CEOs typically underperform the stock market.

The first edition of As You Sow’s Most Overpaid CEOs report, published in 2015, identified the 100 leaders of firms significantly overpaying their chief executives. Advocates of high CEO pay contend that pay was high at these companies as a reward for high shareholder returns.  However, as seen in Figure 1, the average annual total shareholder returns in the 3 years prior (2/28/2012 to 2/28/2015) to a high pay package was essentially the same as it was at companies without the same levels of excess pay.  Then, in the nearly 3 years since (2/28/2015 to 1/1/2018), the group of companies with the most overpaid CEOs underperformed the S&P500.  If savvy investors sold, shorted or underweighted the100 most overpaid firms, they would have earned more than the stock market average.

When we look at the quantitative evidence, pay for performance is basically a myth.

  Figure 2: MOST QUARTILES AND DECILE OF OVERPAID CEOS LAG THE   MARKET     Total Shareholder Return (TSR), annualized over 3-year periods

Total Shareholder Return (TSR), annualized over 3-year periods

Our HIP Investor team analyzed multiple financial indicators over different timeframes for all S&P500 companies and consistently found extremely low correlations (single digit correlation coefficients) between CEO pay and historical financial performance –  whether 1-, 3- or 5-year performance for financial ratios including Return on Equity (ROE), Return on Invested Capital (ROIC), and Total Shareholder Return(TSR) including capital gains and reinvested dividends.

Unbundling the most overpaid 100 into the worst decile of 10 firms, the remainder of the worst quartile, and the remaining three quartiles, most segments underperformed the S&P500 market average.  Again, this year, the worst 10 firms with massively overpaid CEOs destroyed shareholder value, losing money for investors – and dramatically lagging the market by an embarrassingly negative -15.6%. – and this even in one of the longest bull markets in history.

Surprisingly this year, the segment of companies in the second-worst quartile (ranked 26 to 50) in our 2015 report did outperform the S&P500.  Three companies are major contributors to that outperformance, with annualized 3-year returns above 20% per year. Three firms -- Northrop Grumman, Lockheed and Visa – dramatically reduced the level of CEO pay since 2015. In Figure 3, you can see the rank of Overpaid CEOs drop by 65, 93, and more than 145 ranked positions – meaning, they improved by falling lower on the most overpaid list. Corporations and boards are starting to react to mounting pressure and empirical validation of more sensible pay for CEOs.


Rank on Most Overpaid CEOs, and Annualized Total Shareholder Return

Company   2015 rank  2018 rank  3-yr* TSR as of 06/30/2017

Northrop   50               143               + 26.3 %
Lockheed   32               97               + 21.4 %
Visa            37               182             + 20.9 %

For consistency of the Most Overpaid 100 methodology, HIP Investor also analyzed the 2-year performance from the 2016 report until 12/31/2017, as seen in Figure 4, with similar results:  the most overpaid CEOs underperform financially.

  Figure 4: 2016 OVERPAID CEOs LAG THE MARKET     Total Shareholder Return (TSR), annualized over 2-year period

Total Shareholder Return (TSR), annualized over 2-year period

While the worst decile lagged the market by 7.6%, the firms ranked 11 to 25 under-performed by 10.5%

Are Overpaid CEOs a reliable indicator of financial under-performance?  The evidence is compelling. Such disappointing returns are extremely unlikely. If 10,000 everyday investors chose 10 companies randomly from the S&P 500, only 8 of that 10,000 would have done worse than a portfolio comprised of the Top10 overpaid (a less than 1 in 1,000 frequency). This clearly shows that overpaying your CEO is a significant indicator for future underperformance – which we have focused on at HIP Investor since our founding in 2006.

Your portfolio is your money.  The companies and funds you invest in should be listening to you.  However, the most overpaid CEO pay packages are approved by Boards, elected by you the investor, and the mutual funds who hold their stocks.  We encourage you as investors to speak up, vote your “say on pay,” and pressure the companies and funds in your portfolio with this evidence – which can benefit your long-term financial performance and a more appropriate level of rewards for results achieved.


1 Proxy Insight, "Retaking the Wheel: ISS auto-voters take action to become even more passive," Proxy Monthly Volume 4, Issue 5 (July 2017) 6-7.


Rosanna Landis Weaver, Program Manager, Power of the Proxy: Executive Compensation, As You Sow

This is the fourth Most Overpaid CEOs report that Rosanna Landis Weaver has written for As You Sow. Her corporate governance career began with a position in the Corporate Affairs office at the International Brotherhood of Teamsters in 1992, supervising research on corporate governance and management practices. She joined the Investor Responsibility Research Center (IRRC) in 1999 and served as an expert on labor shareholder activism, writing reports on labor fund activism, compensation-related shareholder proposals, and golden parachutes. At Institutional Shareholder Services (ISS), which she joined in 2005, she worked on the executive compensation team as a senior analyst until 2010, with a particular focus on change of control packages, and analyzed Say-on-Pay resolutions. From 2010 to 2012, she was governance initiatives coordinator at Change to Win. Rosanna holds a BA in English from Goshen College and a Masters in American Studies from the University of Notre Dame.



This report was made possible by the generous support of the Stephen Silberstein Foundation. Additional support was provided by the Arntz Family Foundation, The Keith Campbell Foundation for the Environment, Firedoll Foundation, Hanley Foundation, The Libra Foundation, Manaaki Foundation, New Belgium Family Foundation, Roddenberry Foundation, Roy and Patricia Disney Family Foundation, and Singing Field Foundation.

Special thanks to:

  • Many components of this report, including the section on pension funds, were based on data provided by ProxyInsight. The website was invaluable and Seth Duppstadt and Sophia Miles were prompt and patient with answering specific questions.
  • The HIP Investor team conducted a regression analysis, upon which a key component of this report rests, and provided measures used in the sustainability section of the report. HIP, founded in 2006, rates 75,000 investments on all aspects of sustainability (including corporate CEO pay) and how it correlates to future risk and return potential. Onindo Khan, Director, Impact Analytics and R. Paul Herman, HIP’s CEO and founder, were extraordinarily helpful and responsive throughout the process.
  • Much of the mutual fund section of the report was based on data provided by Fund Votes, an independent project started in 2004 by Jackie Cook (CookESG Research). Fund Votes tracks institutional proxy voting and Jackie Cook’s knowledge of mutual fund families and voting practices has been of great assistance.
  • Economist Susan Holmberg served as a research consultant on this project. Her thoroughness and attention to detail were extremely valuable.
  • Steven Clifford, for his fantastic book, “The CEO Pay Machine: How it Trashes America and How to Stop It,” and for participating in our webinar.
  • The As You Sow team; (alphabetically) Andrew Behar, Betsy McMahon, Cody Mitcheltree, Cyrus Nemati, and Zoey Olbum as well as our interns. Thanks also to digital designer Sarah Weingust, copy editor Miriam Holzman-Sharman, John Opet of Art270, and Royce Wells of Comrade agency for his work on website creation.


The aggregated information comprising The Most Overpaid CEOs 2018 represents a snapshot in time of publicly available information regarding shareholder voting with U.S. public companies that may be on the proxy statements and voted on at annual general meetings in 2017. 

The information provided in The Most Overpaid CEOs 2018 is provided “AS IS” without warranty of any kind. As You Sow makes no representations and provides no warranties regarding any information or opinions provided herein, including, but not limited to, the advisability of investing in any particular company or investment fund or other vehicle. While we have obtained information believed to be objectively reliable, As You Sow or any of its employees, officers, directors, trustees, or agents, shall not be responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with use of or reliance on any information contained herein, including, but not limited to, lost profits or punitive or consequential damages. Past performance is not indicative of future returns. 

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