Executive Summary

In reviewing executive compensation program designs and related corporate governance policies, companies should consider current market practices and recent trends to inform boardroom discussions.

Meridian’s 2025 Corporate Governance & Incentive Design Survey provides key insights into executive compensation and corporate governance.

The Survey summarizes market practices at 200 large publicly traded companies across all industries (referred to herein as the “Meridian 200”). These companies have median revenues and market capitalizations of $25.4B and $46.5B, respectively, making them a representative sample of the S&P 500.

All information was gathered from annual proxy statements. Meridian has conducted a similar analysis annually since 2011, with minimal changes to the list of reviewed companies (97% of the 2025 Meridian 200 constituents were reviewed in 2024). This year-over-year consistency allows for the identification of emerging trends. For more details, please refer to the Profile of Survey Companies section.

Governance Practices and Company Policies

Prevalence of Board Diversity Disclosures Decreases: 74% of companies disclose ethnic diversity statistics for current board membership, down significantly from 97% in 2024. This trend appears to coincide with changes in federal policy under the Trump administration as well as updated guidance from some institutional investors and proxy advisory firms regarding DEI-related expectations.

Mandatory Retirement Age Policies Remain Common: Similar to last year, 79% of Meridian 200 companies disclosed a mandatory retirement age policy for board members. Most of these companies set the retirement age between 72 and 75, with a recent trend towards the older end of this range continuing.

Independent Board Chair Used by Half of all Companies: 53% of Meridian 200 companies maintain a separation between the Board Chair and CEO roles. Among the companies that separate the roles, the majority (74%) appoint an independent director as Board Chair.

Companies Cap Outside Board Seats: 92% of companies disclose director overboarding policies. These policies limit the number of public company board seats an incumbent director may hold.

Most Companies Maintain Clawback Provisions Beyond the Dodd-Frank Requirements: In late 2023, NYSE- and Nasdaq-listed companies were required to adopt and implement a Dodd-Frank compliant mandatory clawback policy. 83% of companies choose to maintain policies or provisions that exceed the requirements of the mandatory policy. Companies’ expanded policies feature additional triggers (i.e., beyond financial restatement), cover a broader employee group and/or apply to more elements of compensation.

Proxy Disclosures

Compensation-Related Shareholder Proposals Decline; Support Remains Low: In 2025, 14% of companies received at least one compensation-related shareholder proposal. Most compensation-related shareholder proposals continue to receive limited shareholder support.

Nearly All Companies Engage in Shareholder Outreach: 96% of the Meridian 200 disclose shareholder outreach efforts. 50% of the Meridian 200 provide specific details on feedback received and/or actions taken as a result of the feedback.

SEC “Pay Versus Performance” Disclosures Remain Consistent: Consistent with last year, most companies (80%) choose to compare TSR against an industry specific index and a strong majority of companies (92%) use graphical disclosure to depict the relationship between “compensation actually paid” and performance.

Annual Incentive Plan Design Practices

Earnings Metrics Drive Annual Incentives: 88% of companies include an earnings metric in the annual incentive plan. On average, earnings metrics account for 50% of the overall plan weighting.

Financial Metric Prevalence Remains Consistent: Consistent with previous years, the most prevalent financial performance metrics are operating income, revenue, cash flow and earnings per share (EPS).

Non-Financial Measures Are Also Common; Types of Measures Vary Widely: Most companies (80%) also include non-financial measures in the annual incentive plan. 57% of companies include corporate operational/ strategic goals, while 43% of companies measure individual performance, either as a weighted metric (21% prevalence) or as a modifier (22% prevalence).

Long-Term Incentive Plan Design Practices

Performance Awards Are the Primary LTI Vehicle: Performance-based awards continue to be used by nearly all Meridian 200 companies (99%) in the long-term incentive plan. On average, performance awards represent 62% of CEOs’ annual target LTI value.

Standard Performance Period – 3 Years: It is most common (96%) for Meridian 200 companies to assess performance over a three-year measurement period. Typically, goals are set over the three-year cumulative period, rather than set as individual annual goals.

Relative TSR Remains the Predominant Metric: 80% of companies include a relative TSR measure in performance awards. On average, relative TSR accounts for 54% of the overall plan weighting and most companies (92%) pair TSR with at least one other performance measure. It is more common for companies to incorporate relative TSR as a weighted metric (60% prevalence), rather than a modifier.

See the full report here.