Corporate Governance Outlook 2022

Corporate Governance Outlook 2022, an Equilar publication, analyzes the proxy statements and shareholder voting results for Equilar 500 companies from 2017 to 2021. The Equilar 100, a subset of the largest revenue reporting companies in the Equilar 500, was manually reviewed for specific examples of disclosure in targeted areas. The narrative portion of this report identifies trends in compensation and corporate governance disclosure practices. DFIN and Orrick have provided independent commentary on the most pressing governance issues heading into 2022.

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Key Findings

• Social and environmental issues remain the most common shareholder proposal type. After reaching a peak of 183 in 2017, the number of social and environmental-focused proposals has since fluctuated, falling to 139 in 2021.
• Say on Pay failures increase in prevalence. Say on Pay failures more than doubled since 2017, as 3.4% of Equilar 500 companies failed Say on Pay in 2021.
• Shareholder engagement disclosures continue steady rise. The percentage of Equilar 100 companies mentioning or disclosing topics or processes related to shareholder engagement rose to 93.9% in 2021, a 3.2% increase from 2020.
• ESG disclosures become the standard. The percentage of Equilar 100 companies disclosing or mentioning ESG-related policies rose from 10.3% in 2017 to 81.8% in 2021, highlighting the increased scrutiny surrounding ESG issues in recent years.
• Companies are slowly linking ESG targets to executive annual incentives. During 2021, 21.5% of Equilar 500 companies elected to tie executive bonuses to an ESG-related performance metric.