Monthly Archives: August 2026

What Companies Reward: The Changing Mix of Metrics in Executive Incentive Pay

Posted by Paul Hodgson and Andrew Jones, The Conference Board, Inc., on
Thursday, August 20, 2026
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Paul Hodgson is a Senior Contributor, Governance & Sustainability Center, and Andrew Jones is a Principal Researcher, Governance & Sustainability Center, at The Conference Board, Inc. This post is based on a report developed by The Conference Board in partnership with ESGAUGE, FW Cook, and Ropes & Gray and co-authored by Mr. Hodgson and Mr. Jones.

This report examines how US public companies use financial and nonfinancial performance metrics in executive incentive plans, including where they appear, how heavily they are weighted, and what they signal about changing board priorities. Across short-term incentive (STI) and long-term incentive (LTI) plans in the Russell 3000 and S&P 500, the data point to greater selectivity in nonfinancial measures rather than a broad retreat from them.

Trusted Insights for What’s Ahead®

  • Nonfinancial metrics are common and extend beyond environmental, social & governance (ESG) measures, although boards are becoming more selective about their usage.
  • In 2025, just over half of Russell 3000 and S&P 500 companies used both financial and nonfinancial metrics in STI plans, while exclusive reliance on nonfinancial STI metrics remained rare outside health care and the smallest companies.
  • The STI metric mix is becoming more discerning: broad ESG-labeled metrics, environmental metrics, and human capital metrics have declined, while governance, social, cash flow, and expense metrics, as well as use of board discretion, have increased.
  • For individual nonfinancial and ESG-related STI categories, S&P 500 companies report materially higher use than those in the broader Russell 3000, even though both indexes have similar shares of companies using a mix of financial and nonfinancial STI metrics.
  • When companies use both financial and nonfinancial STI metrics, financial measures still carry most of the payout opportunity, typically weighted about 70% to 75%.
  • LTI plans remain much more financially led, with total shareholder return (TSR), profit, return, and revenue dominating and nonfinancial metrics used selectively.

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Supreme Court All But Ends Corporate Liability for Aiding-and-Abetting Human Rights Abuses

Posted by David Livshiz, Tim Harkness, and Beth George, Freshfields US LLP, on
Thursday, August 20, 2026
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David Livshiz and Tim Harkness are both Partners and Co-Heads of US Commercial Litigation, and Beth George is the Head of US Litigation, Arbitration and Global Investigations at Freshfields US LLP. This post is based on a Freshfields memorandum by Mr. Livshiz, Mr. Harkness, Ms. George, Melissa Hodgman, Christian Vandergeest, and Maria Slobodchikova, all at Freshfields US LLP.

Until the end of June, multinational companies faced a significant litigation risk: suits in U.S. federal courts alleging that they aided-and-abetted human rights abuses committed by foreign governments—even when the alleged conduct occurred entirely overseas—under the Alien Tort Statute (ATS) and the Torture Victim Protection Act (TVPA). These cases are costly to defend and can drag on for years, regardless of their merits.

The U.S. Supreme Court has now largely closed that door. In Cisco Systems, Inc. v. Doe I, 609 U.S. __ (June 23, 2026), the Court held that federal courts have no authority to create new private causes of action under the ATS, and that the TVPA does not extend to aiding-and-abetting claims. The decision significantly curtails the ability of plaintiffs to pursue human rights claims in U.S. courts against corporations—including U.S. companies—whose products or services allegedly facilitated international law abuses by foreign governments or other actors.

For companies operating in regions prone to terrorism and armed conflict, the ruling provides greater legal certainty, reducing the risk that their commercial activities in high-risk jurisdictions will expose them to open-ended ATS litigation in U.S. courts.

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2026 Director Compensation Report

Posted by Daisy Laska, Stephanie Lane, and Ted Simmons, FW Cook, on
Wednesday, August 19, 2026
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Daisy Laska and Stephanie Lane are Consultants and Ted Simmons is a Managing Director at FW Cook. This post is based on their FW Cook memorandum.

Executive Summary

FW Cook’s 2026 Director Compensation Report examines non-employee director pay and program design at 300 U.S. public companies. Approximately 92% of companies also appeared in the 2025 study, supporting reliable year-over-year comparisons.

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DOJ Withdraws Antitrust Guidance for Proxy Advisory Industry

Posted by Craig Waldman, Randi Lesnick, and Ferrell Keel, Jones Day, on
Wednesday, August 19, 2026
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Craig Waldman is a Co-Chair of the Antitrust & Competition Law practice and Chair of the Tech practice, Randi Lesnick is a Co-Chair of the Corporate practice, and Ferrell Keel is a Partner at Jones Day. This post is based on a Jones Day memorandum by Mr. Waldman, Ms. Lesnick, Ms. Keel,  Andrew Levine, and Mark Rasmussen, all at Jones Day.

The DOJ has withdrawn the 1987 BRL issued to ISS, the largest U.S. proxy advisor. The withdrawal follows state-level efforts to regulate the proxy advisory industry, a November 2025 antitrust lawsuit by the Florida Attorney General, and President Trump’s December 2025 executive order on proxy advisory firms.

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Dropbox and the Evolving Governance Debate Over Corporate Domicile

Posted by Sarah Abrams, The OakBridge Team, on
Tuesday, August 18, 2026
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Sarah Abrams is the Executive Vice President at The OakBridge Team and the Co-author of The D&O Diary.

The growing movement of public companies to reincorporate outside Delaware has transformed a policy debate into an increasingly significant source of corporate governance litigation. As companies have explored domiciles such as Nevada and Texas, Delaware has responded with legislative reforms, including Senate Bill 21 (“SB 21”), and judicial decisions that seek to clarify the standards governing these transactions.[1]

Against this backdrop, the recently amended complaint challenging Dropbox, Inc.’s reincorporation to Nevada raises important questions regarding the circumstances under which a reincorporation may be challenged as a breach of fiduciary duty.

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Prediction Market Surveillance: A View from the Trenches

Posted by Robert DeNault (Kalshi) and Daniel Taylor (UPenn), on
Tuesday, August 18, 2026
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Robert DeNault is the Head of Enforcement at Kalshi, and Daniel Taylor is the Arthur Andersen Professor of Accounting at The Wharton School and Director of the Wharton Forensic Analytics Lab at the University of Pennsylvania.

It feels like prediction markets are everywhere these days. As prediction markets expand and trading volumes continue to rise, the industry’s long-term success depends on both established players and new entrants adopting rigorous market surveillance systems. And, over the course of the last year, it has become clear that although many principles from equity-market surveillance are applicable, prediction markets have several distinctive features that must be accounted for to ensure any surveillance system operates effectively.

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What to Expect in SEC Rulemaking: Takeaways From the SEC’s Spring 2026 Regulatory Agenda

Posted by Erin Kauffman, Victoria Anglin, and W. Hardy Callcott, Sidley Austin LLP, on
Tuesday, August 18, 2026
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Erin Kauffman, Victoria Anglin, and W. Hardy Callcott are Partners at Sidley Austin LLP. This post is based on a Sidley memorandum by Sonia Gupta Barros, David Katz, and Charlie Sommers, all at Sidley Austin LLP.

The SEC has released its Spring 2026 Regulatory Flexibility agenda (Spring 2026 Agenda). The Spring 2026 Agenda announces an ambitious set of potential rulemaking proposals, across all the major SEC operating divisions, for the next year. Most of the proposed rulemakings are strongly deregulatory in nature, although details are limited. The SEC had not previously announced some of the proposed rulemaking topics.

In a statement published on July 7, 2026, SEC Chairman Paul Atkins described the Commission’s Spring 2026 Agenda as “robust rulemaking” that will return the agency to its “core mission of protecting investors; facilitating capital formation; and maintaining fair, orderly, and efficient markets.”[1] Read alongside the 2025 Regulatory Flexibility Agenda (the 2025 Agenda), the Spring 2026 Agenda reveals a Commission that has rapidly expanded its active rulemaking program while simultaneously executing a sweeping deregulatory reset.

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Wildest Campaigns of 2026

Posted by Antoinette Giblin, Diligent Market Intelligence, on
Monday, August 17, 2026
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Antoinette Giblin is Editorial Manager at Diligent Market Intelligence (DMI). This post is based on her Diligent memorandum.

Despite a fresh wave of market volatility, shareholder activism proved remarkably resilient in the first half of 2026, with activity holding steady at H1 2025 levels.

M&A continued to build momentum as a leu lever for activists with many also more willing to stand in the way of deals they viewed as undervalued or poorly timed. Outside of dealmaking, AI also found its place in the activist playbook with key technology brands pressed on integration and cost rationalization.

Settlements provided the only real path to the boardroom with few fights going the whole way to a vote as boards and activists worked to find common ground uncertain markets.

The Diligent Market Intelligence editorial team tracked the season’s defining contests. Here are our picks for the wildest:

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Shareholder Engagement Responses to Adverse Sayon-Pay Votes

Posted by Nicholas Sasso, Erin Conlon, and Jennifer Dorney, DragonGC, on
Monday, August 17, 2026
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Nicholas Sasso is a Product Specialist, Erin Conlon is a Legal Analyst, and Jennifer Dorney is the Head of Marketing at DragonGC. This post is based on a DragonGC memorandum by Mr. Sasso, Ms. Conlon, Ms. Dorney, Neil McCarthy, Sophia Ojjeh, and Leo Tadikonda, all at DragonGC.

Shareholder Engagement Responses to Adverse Say-on-Pay Votes

This is our third annual report on how companies with adverse say-on-pay votes responded with shareholder engagement programs the following season to address shareholder concerns.  Our report on the 2023-2024 season is available here, and for the 2024-2025 here.

Background

SEC rules require that public companies hold a separate shareholder advisory vote to approve the compensation of executives. This covers compensation disclosed per S-K Item 402 including CD&A, the compensation tables, and other narrative executive compensation disclosures.

Most years for most companies this vote passes with greater than 80% support from those shareholders who vote on the matter. But sometimes for some companies the approval rate is less than 80%. Sometimes the resolution receives less than a majority and fails to pass at all.

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2026 Proxy Season: CPA Political Disclosure and Accountability Effort Maintains Strong Momentum

Posted by Dan Carroll, David Pahlic, and Bruce Freed, Center for Political Accountability, on
Sunday, August 16, 2026
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Dan Carroll is the Vice President for Programs and Counsel, David Pahlic is the Director of Programs, and Bruce Freed is the President at the Center for Political Accountability. This post is based on their CPA report.

The 2026 proxy season continued to show strong shareholder support for the Center for Political Accountability’s corporate political disclosure and accountability effort in an increasingly challenging environment.

Companies face increased uncertainty in their election-related spending. The reputational risks that are always present in political spending are now coupled with the regulatory risks of an executive eager to punish perceived enemies. Moreover, with high stakes midterm elections approaching, the scrutiny and risks posed to companies by their political spending, the candidates and issues they support, the outcomes and policies they advance and questions – and concerns – about corruption have increased.

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