Part I: Most Common Reasons for a Low Say On Pay Vote (2023)

March 2024

In this briefing, we delve into the most common reasons why shareholders vote against a company’s advisory vote on executive compensation (Say on Pay). We also highlight the reasons why proxy advisory firms (Institutional Shareholder Services (ISS) and Glass Lewis) commonly recommend voting against Say on Pay. In Part II, Hugessen will conduct an analysis assessing the impact that a negative recommendation from one or both proxy advisors might have on a company’s Say on Pay vote.


We reviewed the rationales provided by institutions shareholders of S&P/TSX issuers that received a Say on Pay score of below 80% in 2023 (n=30)1. We also gathered compensation-related flags raised by ISS and Glass Lewis when determining their Say on Pay vote recommendations for this same group of companies.

Key Findings

The most common reasons behind ‘against’ votes on Say on Pay in 2023 were pay and performance misalignment and problematic pay practices. This was consistent with the most common rationales proxy advisors identified when recommending against these votes (see next page). 

While many sophisticated institutional investors conduct their own proxy voting analysis, the proxy advisors still play an influential role opining on Say on Pay. Among this group of 30 companies with sub-80% Say on Pay results, 26 received an against vote recommendation from either from ISS or Glass Lewis, with 7 receiving an against vote recommendation from both.

Why Shareholders Voted Against Say on Pay

Summarized below are the most commonly disclosed reasons why shareholders voted against Say on Pay for the 30 companies in our study. We note that it is common for companies to receive rationales flagging more than one issue (e.g. a pay for performance misalignment and an incentive calibration issue).

Note: This does not represent an exhaustive list; shareholders are not required to disclose the rationale behind their vote, thus this captures only voluntary disclosure.

Most Common Reasons

Flags from ISS and Glass Lewis

Summarized below are the most common compensation flags / negative program features outlined by ISS and Glass Lewis among the 30 companies in our study. Glass Lewis was more likely to identify issues with program structure and design than ISS was.


ISS Pay for Performance Concern and Corresponding Say on Pay Recommendation

In the exhibit below, we showcase the relationship between ISS’ quantitative Pay for Performance concern grade and their corresponding vote recommendation on Say on Pay from the dataset. Note: Only 28 of the 30 companies in our study had a pay for performance evaluation conducted by ISS.

ISS pay


As we enter the 2024 proxy season, understanding the most common reasons why proxy advisors recommend, and shareholders vote against Say on Pay can help issuers prepare for and respond to potential issues. Having an awareness of shareholder views ahead of the annual general meeting (AGM) will limit any surprises.

Hugessen supports clients throughout the year in making the right decisions on executive compensation in an environment of heightened complexity and scrutiny. This may include identifying issues ahead of the AGM (Hugessen is able to conduct in-house pay for performance simulations using disclosed ISS and Glass Lewis quantitative methodologies) and/or providing advice on how best to address them (incentive program design changes, proxy circular disclosure, shareholder engagement, etc.).

1Data summarized from Diligent’s Market Intelligence Voting Module