Significant retention payments to C-suite executives are driving the brunt of investor dissent in the U.S. and Europe this year, according to Glass Lewis’ latest proxy season briefings.

In a set of proxy season regional reviews, published August 5, the proxy adviser highlighted that “say on pay” proposals continue to be a point of contention among investors.

In the U.S., companies have frequently made “numerous, one-off grants in a bid to attract and retain executives,” in light of the highly competitive market for executive talent.

Some “common issues” with U.S. pay plans this season include performance-based one-off awards “overwhelmingly” favoring stock price appreciation over very short windows of time, Glass Lewis said.

In its Continental Europe proxy season briefing, the proxy adviser similarly noted that overly “generous” remuneration packages are becoming the norm, driven by retention concerns and following a year of restraint as boards sought to mitigate the impact of COVID-19.

Shareholders failed to yield the same profits, with many European companies making reductions to their financial forecasts and proposed dividend payments due to uncertainty surrounding the war in Ukraine.

Despite this, across Europe and the U.K. Glass Lewis noted a “significant uptick” in the use of environmental and social (E&S) metrics under both short- and long-term incentive plans, particularly among the FTSE 250.

In the U.S., companies are more broadly providing enhanced disclosure concerning their environmental and social impacts, which has led to an overall increase in the quality and quantity of available ESG data.

Western companies are also making great strides in board diversity, the proxy adviser said.

In the U.S., companies have been “responding quickly to investor and regulatory interest” and disclosing more information surrounding board composition. With Nasdaq’s exchange requirement coming into effect this month, Glass Lewis expects to see more companies disclosing board composition matrices.

In the U.K., diversity reporting similarly remains on an “upward trajectory,” with 94.3% of FTSE 100 companies having achieved the Parker Review target of at least one ethnic minority director on the board.