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NEWS from the Office of the New York State Comptroller
Contact: Press Office 518-474-4015


DiNapoli and NY State Pension Fund Reach Agreements with Major Companies on Executive Pay

Companies to Consider Wages of Entire Workforce When Proposing Executive Compensation

December 21, 2018

New York State Comptroller Thomas P. DiNapoli today announced that the New York State Common Retirement Fund has reached agreements with Microsoft Corp., CVS Health Corp., Macy's Inc., The TJX Companies Inc. and to reexamine their CEO and executive pay and adopt policies that take into account the compensation of the rest of their workforces. In response to the agreements, the Fund withdrew its shareholder resolutions with the companies.

"We've seen a growing disparity in corporate income in the United States for years, with CEO pay rising dramatically while wages for most other company employees have remained flat," DiNapoli said. "We are encouraging companies to adopt policies that take their entire workforce into consideration rather than setting CEO pay solely by benchmarking it against other CEOs. Overall employee compensation and executive pay has been and will continue to be a key factor for how we engage with companies going forward."

According to the Economic Policy Institute, CEOs of America's largest firms earned $271 for every dollar their employees earned in 2016. In 1995, the CEO-to-worker pay ratio was 123-to-1; in 1978, it was 30-to-1; and in 1965, it was 20-to-1.

Many companies' compensation committees use peer group benchmarks to set their target CEO compensation. These target pay amounts are then subject to performance adjustments. Although many companies target CEO compensation at the median of their peer group, certain companies have targeted their CEO's pay well above the median. In addition, peer groups can be "cherry-picked" to include larger or more successful companies where CEO compensation is higher.

DiNapoli has long advocated for disclosure of CEO pay ratio, which was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act and implemented by the SEC in 2015.

Companies may disclose supplemental information about their workforce to provide context and explain their company's pay ratio data.

DiNapoli believes the Fund's portfolio companies should align CEO pay practices with their pay practices for other employees and provide supplemental information that helps investors. The Fund has previously come to agreements on this issue with the following corporations:


CVS Health Corp. (filed with Zevin Asset Management)
Macy's Inc.
Microsoft Corp.,
The TJX Companies Inc. (filed with AFL-CIO Equity Index Fund and Zevin Asset Management)


BB&T Corporation (filed with AFL-CIO Equity Index Fund)
Discovery Communications Inc. (filed with AFL-CIO Equity Index Fund)
Regeneron Pharmaceuticals Inc. (filed with AFL-CIO Equity Index Fund)

The Fund currently has a similar proposal at Archer-Daniels-Midland Company and will file with several other companies in the coming year.

About the New York State Common Retirement Fund

The New York State Common Retirement Fund is the third largest public pension fund in the United States, with an estimated $207.4 billion in assets under management as of June 30, 2018. The Fund holds and invests the assets of the New York State and Local Retirement System on behalf of more than one million state and local government employees and retirees and their beneficiaries. The Fund has a diversified portfolio of public and private equities, fixed income, real estate and alternative instruments.