Monthly Archives: June 2026

CEO Pay Levels in the U.S. Are Converging Amid Increased Benchmarking

Posted by Torsten Jochem (University of Amsterdam), Gaizka Ormazaba (IESE Business School), and Anjana Rajamani (Rotterdam School of Management, Erasmus University), on
Thursday, June 25, 2026
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Torsten Jochem is an Associate Professor in Finance at the University of Amsterdam, Gaizka Ormazabal is Associate Dean for Research and Professor of Accounting and Control at IESE Business School, and Anjana Rajamani is an Associate Professor of Finance at the Rotterdam School of Management, Erasmus University. This post is based on their recent paper.

The pay levels of CEOs of publicly listed firms in the U.S. have converged sharply over the last two decades, amid the increasing use of compensation benchmarking against other firms with a similar profile.

In a new paper, we looked at a wide sample of publicly listed U.S. firms over the period 1996 to 2023, tracking the variation in pay across chief executives. After peaking around the year 2000, we find the cross-sectional variation in CEO pay levels has declined almost 40% since 2007. Pay has converged toward the median at both tails of the distribution curve, and that is the case at an economy-wide level, across different industries, within groups of similar-sized companies in the same industries, and within compensation peer groups.

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2026 Shareholder Proposal Season Early Review and Look Ahead to 2027

Posted by Brad Goldberg, Beth Sasfai, and Michael Mencher, Cooley LLP, on
Thursday, June 25, 2026
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Brad Goldberg and Beth Sasfai are Partners, and Michael Mencher is Special Counsel at Cooley LLP. This post is based on a Cooley memorandum by Mr. Goldberg, Ms. Sasfai, Mr. Mencher, Reid Hooper, Justin Kisner, and Vince Flynn.

Despite the heightened drama of the 2026 shareholder proposal season – precipitated by the landmark announcement from the staff of the Division of Corporation Finance of the SEC (SEC staff) that it would generally not respond to no-action requests during the 2026 proxy season – the year-over-year trends remained largely consistent with the prior year. Overall proposal volume continued to decline, driven primarily by fewer environmental and social (E&S) proposals, while governance and anti-ESG proposal activity and support levels remained broadly consistent with last year.

This alert provides an overview of proposal submissions and early voting trends for the 2026 season, examines exclusion and litigation developments under the SEC staff’s new no-action policy, as well as evolving proponent tactics, and considers the implications for what may be an even more chaotic 2027 season.

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Can You Hear Me Now? The Importance of Maintaining an In-Person Option for AGMs

Posted by Jen Sisson, Jakub Brejdak, and Ayan Tewari, ICGN, on
Wednesday, June 24, 2026
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Jen Sisson is the CEO, and Jakub Brejdak and Ayan Tewari are Senior Policy Executives at International Corporate Governance Network. This post is based on their ICGN memorandum.

Technology should make shareholder meetings more accessible. It should not make boards less accountable.

Across global markets, investors broadly welcome the use of digital tools to improve participation in annual general meetings. Remote access can help shareholders attend meetings they might otherwise miss, reduce logistical barriers and broaden engagement. But access is not the same as accountability. An AGM is not just an administrative event. It is one of the few formal moments each year when the board is publicly answerable to shareholders. It is also a valuable opportunity for companies to hear directly from their investors, understand shareholder perspectives and build the trust that supports long-term value creation.

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Explaining Delaware’s Dominance

Posted by Ofer Eldar (UC Berkeley) and Lorenzo Magnolfi (OSU), on
Wednesday, June 24, 2026
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Ofer Eldar is a Professor of Law at UC Berkeley and Lorenzo Magnolfi is an Associate Professor of Economics at Ohio State University. This post is based on their recent paper.

For most of the modern era, Delaware has been the default home of American corporate law. That dominance is familiar, but it is also puzzling. Delaware does not offer corporations a simple code of bright-line rules. It offers fiduciary standards, judicial review, and a continuing stream of case law. Other states have often promised more predictable statutes that limit litigation and protect managerial discretion. Yet public companies continued to choose Delaware in large numbers.

The current debate over DExit makes this puzzle newly important. High-profile firms have explored or completed moves to states such as Nevada and Texas, often arguing that Delaware law has become too uncertain or too intrusive. To assess that critique, it helps to ask why firms chose Delaware in the first place.

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M&A, Activism and Corporate Governance

Posted by Matthew L. Ploszek, Adam M. Sanchez, Cravath, Swaine & Moore LLP, on
Wednesday, June 24, 2026
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Matthew L. Ploszek and Adam M. Sanchez are Partners at Cravath, Swaine & Moore LLP. This post is based on a Cravath memorandum by Mr. Ploszek, Mr. Sanchez, Kimberley S. Drexler, Evan A. Hill, and Margaret T. Segall.

Mergers and Acquisitions

The U.S Government as a partner: what you should know about M&A and the U.S. government

Under the Trump administration, the U.S. government has significantly shifted its industrial policy to act as a cornerstone investor in companies operating in sectors involving strategic assets, including energy, critical infrastructure, critical minerals, supply chain resilience, advanced technology and national security. Since the beginning of 2025, the U.S. government has invested, or committed to invest, $20.9 billion in 16 transactions to acquire direct ownership stakes in companies operating in these sectors.[1] However, these transactions do not fit squarely within a single investment category (e.g., a U.S. government partnership may include elements of a minority equity investment, project finance, grants, loans, guarantees, commercial arrangements, regulatory facilitation and strategic partnerships). The U.S. government may be “wearing many hats” in connection with making these investments, so companies should be careful not to characterize these transactions through a narrow lens at the outset and instead assess the full range of legal, regulatory and commercial considerations that may apply.

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Tariffs and Incentive Pay: Assessing the Impact on Annual and Long-Term Incentive Payouts

Posted by Shaun Bisman and Margaret Engel, Compensation Advisory Partners, on
Tuesday, June 23, 2026
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Shaun Bisman is a Partner and Margaret Engel is a Founding Partner at Compensation Advisory Partners. This post is based on a CAP memorandum by Mr. Bisman, Ms. Engel, Maimouna Gueye, and Bhavika Podduturi.

On April 2, 2025, referred to as “Liberation Day,” the Trump Administration announced a universal 10% tariff on all imported goods. In addition, the Administration imposed country-specific “reciprocal tariffs” on 57 nations, bringing total tariff rates to as high as 50% for certain trading partners. Major manufacturing hubs that account for a significant share of U.S. imports, including China, Vietnam, and India, were among the most significantly impacted, with certain categories of goods from these countries subject to materially higher effective tariff rates depending on industry and product type.

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The New CEO Progression Blueprint: Expanding CEO Succession Optionality During Uncertain Times

Posted by Margot McShane and Hetty Pye, Russell Reynolds Associates, on
Tuesday, June 23, 2026
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Margot McShane co-leads the Board & CEO Advisory practice, and Hetty Pye is a senior member of the Board & CEO Advisory practice at Russell Reynolds Associates. This post is based on a Russell Reynolds memorandum by Ms. McShane, Ms. Pye, Alix Pollack, and Leah Christianson.

Why traditional CEO succession planning is falling short

CEO succession and selection is arguably the most consequential decision a board will make. More than any other leadership decision, it determines who will shape the enterprise’s strategy, culture, credibility with investors, and enduring performance. Yet in many organizations, CEO succession is narrow, rushed, and ultimately holds little connection to the future of the business. Too often, succession is treated as a discrete event rather than the sustained leadership imperative it has become, with only 8% of boards planning more than five years in advance of CEO succession.

Simultaneously, the context around the CEO role has changed dramatically. Markets are more volatile. Transformation is the new normal. Stakeholder expectations are broader, louder, and less forgiving. At the same time, the CEO role itself has expanded in scope and complexity. The demands of enterprise leadership now extend well beyond operating performance. CEOs are expected to lead through disruption, manage competing stakeholder pressures, set direction amid ambiguity, and sustain trust under intense scrutiny. Perhaps unsurprisingly, as demands on the role grow, average CEO tenure has dropped to 7.1 years, acutely short tenures of just 30 to 36 months are increasingly common (up 79% year over year), and for those not yet in seat, interest in the CEO role is declining.

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When the Call is Coming From Inside the House

Posted by Riyaz Lalani and Dan Gagnier, Gagnier Communications, on
Monday, June 22, 2026
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Riyaz Lalani is a Managing Director and Dan Gagnier is a Managing Partner at Gagnier Communications. This post is based on their Gagnier Communications memorandum.

Activist preparedness exercises are often premised on opportunistic investors launching a public campaign to enlist and rally the support of institutional investors. While we still see this scenario play out regularly, companies underestimate the extent to which activist investors have been informally encouraged or enlisted by other stakeholders including traditional institutional investors, members of the board or management, or private equity suitors.

This is not a new concept. However, in our work with public companies and professional activist investors, the implications of a ‘request for activism’ (RFA) are not always well understood or appreciated, including by the activists enlisted by other investors.

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AI Drafting Board Minutes? Hold Up, Wait a Minute. It’s Complicated

Posted by Sonia K. Nijjar, Jenness E. Parker, and Yingchuan (Grace) Mo, Skadden, Arps, Slate, Meagher & Flom LLP, on
Monday, June 22, 2026
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Sonia K. Nijjar and Jenness E. Parker are Partners and Yingchuan (Grace) Mo is a Counsel at Skadden, Arps, Slate, Meagher & Flom LLP. This post is based on their Skadden memorandum.

Key Points

  • Using artificial intelligence tools to record or transcribe board meetings, or generate minutes, can create detailed records of confidential discussions that could create problems if they have to be turned over in litigation.
  • In addition to the issues with minutes, other uses of AI by directors can pose legal problems. For instance, communications between directors and AI tools are generally not protected by attorney-client privilege, and AI-assisted materials may not qualify for work product protection — meaning candid exchanges with a chatbot, as well as AI-generated drafts, may be discoverable in litigation.
  • AI-generated materials should be treated like any other records and should be preserved when litigation becomes likely.

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Proxy Advice, ESG Ratings and Indices in Global Capital Markets

Posted by Adriana De La Cruz, Tiziana Londero, and Hitesh Tank, OECD, on
Sunday, June 21, 2026
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Adriana De La Cruz, Tiziana Londero, and Hitesh Tank are Policy Analysts in the Capital Markets and Financial Institutions Division within the Directorate for Financial and Enterprise Affairs at the Organisation for Economic Co-operation and Development (OECD). This post is based on their OECD report.

The rise of institutional investors as the primary owners of listed equity in many markets has made capital market service providers essential actors in global markets. Unlike asset owners and asset managers, proxy advisors, ESG rating and data providers, and index providers have no direct fiduciary duty to end investors. Nevertheless, the quality and objectivity of the services they provide carry significant implications for stewardship, capital allocation and market efficiency.

A new OECD report examines the regulatory frameworks for market service providers in 50 jurisdictions[1] participating in the work of the OECD Corporate Governance Committee. The report highlights emerging trends, areas of convergence and opportunities for improvement.

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