Tyler Papineau
Meridian’s 2025 Corporate Governance & Incentive Design Survey offers insights into governance policies, compensation-related proxy disclosures and incentive design practices at 200 large cap U.S. corporations.
Highlights
• 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.
• 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: 83% of companies 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 or apply to more elements of compensation.
• 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.
• 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.
• Relative TSR Remains the Predominant LTI 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.
Full survey results can be downloaded by clicking the “Download as PDF” button above. This survey was authored by Tyler Papineau and other consultants. Questions and comments should be directed to Mr. Papineau at tpapineau@meridiancp.com or (224) 453-2608.
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The Client Update is prepared by Meridian Compensation Partners’ Governance and Regulatory Team led by Donald Kalfen. Questions regarding this Client Update or executive compensation technical issues may be directed to Donald Kalfen at 847-235-3605 or dkalfen@meridiancp.com.
This report is a publication of Meridian Compensation Partners, LLC, provides general information for reference purposes only, and should not be construed as legal or accounting advice or a legal or accounting opinion on any specific facts or circumstances. The information provided herein should be reviewed with appropriate advisors concerning your own situation and issues.