Companies talk the talk about aligning pay to performance but do they walk the walk? Not so much, according to Pay Dirt 2012, Glass Lewis’ examination of the most overpaid, underpaid and highest paid executives in the U.S. and abroad.

Using our proprietary pay-for-performance model, Glass Lewis enables shareholders to quantitatively assess whether compensation committees have fulfilled their increasingly common promises to tie executive compensation to executive performance. The report examines companies in the S&P 500 and Russell 3000 indices, and in the global markets, examines companies in Brazil, Canada, United Kingdom and Continental Europe.

Among the key findings:

  • The misalignment between pay and performance is most glaring in the Russell 3000 Overpaid 25, with a median change in CEO pay of positive 15.5% and median change in EPS growth of negative 15.21%.
  • For all but one company reappearing on the list of overpaid CEOs, at least 35% of voters said nay on pay at their last annual meeting, and some companies that have appeared on the list for an alarming third-year run (Abercrombie & Fitch, Lockheed Martin Corp, and Allegheny Technologies) have earned particular scrutiny.
  • Companies on the “underpaid” lists are less likely to grant performance-based, short-term incentives (in the case of the Russell 3000 Underpaid list, much less likely). Further, twice as many underpaid companies left bonuses entirely up to the compensation committee’s discretion.

The report also spotlights the “big fish,” Glass Lewis’ list of the most eye-popping individual pay packages of 2012. It includes many of the usual suspects, most of whom made the cut because of time-vesting equity grants. (See Apple’s Tim Cook.)

It also takes a look at those CEOs who humbly take a nominal salary, say $1 — or no salary at all. How benevolent are they? Despite receiving no base salary at all, Mario Gabelli of GAMCO Investors Inc. made our Highest Paid CEOs list for fees and compensation he received.

A special section of our report is devoted to banks, which regulators, media and the public have blamed for having poor incentive structures and spiraling executive pay that paved the way for the global financial crisis.

As the say-on-pay movement continues to gain momentum, quantitative analysis like those provided in Pay Dirt 2012 will be critical for shareholders to assess a company’s success at tying pay to performance in a meaningful, transparent way.

Clients of Glass Lewis can access the report one of two ways: Those access to, first log in using your credentials, and then you can download Pay Dirt 2012 here, or for those who exclusively use our ViewPoint voting platform, please email your Client Services Manager to request the reports.

Non clients can request the report through