Following on our previous stories on this subject, Semler Brossy has
published a study examining new proxy statements filed in December 2020 and January 2021 for human capital management disclosures. The companies selected all had a market cap greater than $3 billion and median employee headcount in the 10,000 – 15,000 range. Specific findings include:
- 62% of the proxies filed this December and January contained detailed HCM disclosure.
- More than half of these disclosures (36% of the full study population) represent the company’s first such proxy disclosure of HCM details.
- 26% of companies reviewed had disclosed HCM details in a previous proxy statement.
- The median word count increase was 47%, and 12 of the 14 companies increased by at least 20%.
- The most likely indicators of HCM disclosures were the number of employees and the use of HCM within the executive compensation program.
- 28% of the companies included human capital related performance in the executive compensation program.
- The median number of topics included was three, with common topics including:
- D&I – 45% of all proxies
- Workplace culture – 36%
- COVID-19 – 34%
- Employee safety – 23%
- Workforce demographics – 19%
- Human capital governance – 17%
- Talent development – 9%
The study included a number of sample disclosures that may be of interest. There was significant variance in the length and location of disclosures; median length was between 600 and 900 words, but a third of disclosures were less than 300 words while some were multiple pages. Just under a third (30%) included these disclosures under corporate governance while the same number included a new human capital section. About 15% of the companies included these disclosures in the CD&A.
