The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Sun, 21 Jun 2026 11:30:41 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Seven Venial Sins of Executive Compensation – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Seven Venial Sins of Executive Compensation https://corpgov.law.harvard.edu/2019/05/21/seven-venial-sins-of-executive-compensation/?utm_source=rss&utm_medium=rss&utm_campaign=seven-venial-sins-of-executive-compensation https://corpgov.law.harvard.edu/2019/05/21/seven-venial-sins-of-executive-compensation/#comments Tue, 21 May 2019 19:06:11 +0000 https://corpgov.law.harvard.edu/?p=118670?d=20190521165224EDT Posted by John Roe, Institutional Investor Services, Inc., on Tuesday, May 21, 2019
Editor's Note:

John Roe is Head of ISS Analytics, the data intelligence arm of Institutional Shareholder Services, Inc. This post is based on an ISS Analytics memorandum by Mr. Roe. Related research from the Program on Corporate Governance includes the book Pay without Performance: The Unfulfilled Promise of Executive Compensation, and Paying for Long-Term Performance (discussed on the Forum here), both by Lucian Bebchuk and Jesse Fried.

Compensation disclosures have grown significantly over the last decade (mostly for the better), and they continue to evolve with the ongoing engagement between companies and shareholders. Certain compensation practices are known for raising investor concerns, leading to difficult conversations between investors and boards and higher levels of investor opposition of executive pay programs. But beyond outright egregious practices, a careful review of the diverse set of compensation programs available may reveal some compensation practices that do not appear as significantly concerning but can raise pointed questions about a compensation program’s alignment with shareholders’ interests.

We call these potential transgressions the venial sins of executive compensation, and they are based on opinions and observations formed after several years of experience reviewing executive compensation disclosures and discussing compensation practices with investors. None of these opinions reflect an official ISS position or a preview of upcoming ISS voting policy, but they are meant to highlight potential risks related to otherwise sound incentive structures, as observed by the author.

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