Banning drag is a drag, WOMEN RULE, and office phantoms ??

FRIDAY WRAP | 02.24.23

Story of the Week: Clorox CEO Linda Rendle Calls Out Limited Diversity at Top Consumer Event

“It’s great to see the diversity improving in this room, but I have to make a note that the diversity on this stage is not where it needs to be.”

Goodliest of the Week: Labor Board rules: Companies can't enforce silence for severance pay

Assholiest of the Week: Distraction Politics ??

1. Tennessee is set to become the first US state to ban drag
2. Pence's nonprofit rolls out digital ad campaign to take on ESG
3. Proving it’s theater: BlackRock's $4 Billion of Texas Assets Undercuts Divestment Vows

Exhaustingest of the Week: An activist group is spreading misinformation to stop solar projects in rural America

BOARD SABERMETRICS STORY OF THE WEEK…

AMAZON TAKES THE CAKE FOR BIGGEST CEO-WORKER PAY GAP IN AMERICA

According to the nonpartisan Economic Policy Institute, CEO compensation has increased by 940% since 1978 while worker pay increased a mere 12% during that same period. Business Pants covered this story last week, leveraging our Board Sabermetrics data to add a bit more color to the story.

Here are the (not so) startling Amazon stats:

• CEO Pay: $212.7M
• Median Worker Pay: $32,855
• CEO-Worker Pay Ratio: 6,474:1
• CEO Pay Change Percentage: +12,546.9%
• Explanations for the pay change: Online shoppers flocked to Amazon amid the pandemic leading to a 220% increase in profits. CEO Andy Jassy got a massive pay increase, much of which comes “in the form of stock options that will vest over 10 years” when he replaced Jeff Bezos. When Bezos was the CEO the year prior, his pay was approximately $1.7 million. It isn’t uncommon for new CEOs to receive additional incentives at the start of their terms.?Meanwhile, the pay increase for an average worker was 13.3%—higher than many companies—but still paling in comparison to the CEO's.

Despite all of this, it’s still Bezos’s world and we’re all just living in it. Even as non-CEO, Bezos’s influence over the board is 68%. In comparison, the pay committee’s influence comes in at 6.57%, just under Jassy’s 6.72% influence. ??

It took our team just a bit of time (and our incredible Board Sabermetrics data) to glean these insights. If you want Board Sabermetrics at your disposal, reach out!

?? NERD ALERT ??

Women increase readability of 10-K Management Discussion and Analysis, which in turn improves firm performance.

In one of Matt’s favorite Nerd Alerts to date, he reviews a paper titled Board Gender Diversity and Managerial Obfuscation: Evidence from the Readability of Narrative Disclosure in 10-K Reports.

In this paper, Muhammed Nadeem looked at over 6,000 10-K reports of Russell 3,000 companies from 2002–2018, reviewing them for readability. The readability of 10-K reports determines the usefulness of information disclosure for stakeholders, particularly individual investors.

Findings: Increased independent female representation on board of directors, particularly on audit and compensation committees, has a significant positive impact on readability, which in turn improves firm performance.

Free Float’s translation: When women are added to boards—particularly in roles where they have to review and edit 10-K Management Discussion and Analysis—they tell their idiot-male counterparts to STFU, write in plain English, and show charts.

?? BONUS ?? Board Sabermetrics Data:

• Only 7% of the largest 2,300 publicly traded companies have more women on the audit and compensation committees OR have more female influence on the board in those committees than men do
• More than 90% of US company reports will read like total nonsense

MEANWHILE, ON STAGE…

… it’s a spooky edition of corporate theater this week! Office phantom, Harold, is on the loose at Clarkson Corp and can’t help but respond to back-to-office mandates. ??

CAN’T GET ENOUGH ESG?

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