By Jessica DiNapoli

NEW YORK (Reuters) – Investors have rejected a record number of executive compensation plans in non-binding votes of U.S.-listed companies this year, objecting to pay rises and the easing of performance targets in the wake of the COVID-19 pandemic, according to an analysis by consulting firm ISS Corporate Solutions.

Some companies have argued that protecting executive pay in a downturn is necessary to keep top managers incentivized, given the crucial role they play in steering their business. That idea has been increasingly met with skepticism from investors who say that the shifting of performance goalposts is unwarranted and demoralizes employees who are not shielded in the same way.

A record 14 S&P 500 companies had more than 50% of investors reject executive pay packages so far this year. That number is set to rise as more executives face votes in the coming weeks, according to ISS Corporate Solutions. Investors voted down a total of 12 CEO pay plans in 2020.

“We still have 200 or more meetings to go, and we are likely to see more failures,” said Brian Johnson, an executive director at ISS Corporate Solutions.

The record was reached last week, when 53% of shareholders invested in oilfield services firm Halliburton Co voted down CEO Jeff Miller’s $22.3 million pay plan, which is roughly $10 million more than he earned in 2019.

Cruise ship operator Norwegian Cruise Line Holdings Ltd also faced a defeat from its investors on executive pay plans on Thursday, according to a securities filing.

Investors this year have also rejected executive pay plans at industrial company General Electric Co, coffee retailer Starbucks Corp and chip maker Intel Corp.

Losing the shareholder vote can put pressure on corporate boards and executives to negotiate new pay deals. Roughly two years ago, Walt Disney Co renegotiated the compensation of its chief executive at the time, Bob Iger, to toughen his performance targets after shareholders voted down his pay.

Roughly 10.6% of companies changed short-term incentive programs in the pay plans, and 3.3% adjusted long-term awards, ISS Corporate Solutions found, bolstering executive pay in many cases.

In most years, “investors almost uniformly reject those changes because you’re completely disrupting the link between pay and performance,” Johnson said.

Pay plans at companies that underperformed financially, such as Phillips 66 and Walgreens Boots Alliance Inc, were also rejected by investors, Johnson said.

ISS Corporate Solutions found that automobile and auto part makers, real estate firms and technology hardware and equipment companies changed pay the most during the year compared to other industries.

(Reporting by Jessica DiNapoli in New York; Editing by Aurora Ellis)

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