 Voting newswire. To register for a demonstration and trial of the product,

While shareholder support for executive pay packages has been rising in recent years, investor confidence is far from universal with significant pockets of resistance continuing to surface in sectors such as technology and real estate. 

According to Diligent Market Intelligence (DMI) data, average support for “say on pay” proposals at Russell 3000 companies stood at 90.8% in the first half of 2025, up from 89.6% in 2021. The share of companies failing these non-binding votes, defined here as less than 50% support, saw a sharper fall from nearly 3% in 2022, to just 0.8% in the first half of this year. 

“Here in the U.S., there is now a pretty clear understanding of what is best practice and what are some of those guardrails around how to put together an appropriately designed compensation plan,” noted Rob Main, managing partner at Jasper Street Partners. “But I think in this environment where investors are more cautious, if you're going well outside those lines, those are the situations that are going to get the attention of the investors, and those are going to be the ones where they vote against say on pay.” 

Main pointed to three red flags that are driving revolts: One-time awards, inflationary changes to pay plans that are already in place, and compensation committees using a lot of discretion and not backing that up with clear disclosure around why. 

Yet a more divided picture lies beneath the averages with certain sectors struggling to convince investors that their pay practices are fair and aligned with performance. 

Technology is one of the sectors to consistently test investor patience on pay. Average support for pay proposals across the sector has hovered below 89% since 2021, with the first half of 2025 at 88.2%. Software has been especially susceptible, DMI data show, with companies like Forge Global, Core Scientific and Progyny facing notable opposition toward pay plans at their 2025 annual meetings. 

The race for talent among technology companies is also the most extreme, Ira Kay at compensation advisory firm Pay Governance, told DMI. “It’s the most cutthroat of any sector.” 

That competition has driven controversial practices, including large upfront bonuses and underpriced stock options. At Microchip Technology, shareholders rejected the company’s executive pay plan in August, with 54.4% of the votes cast against, down from nearly 94% support achieved on the plan presented a year earlier. Chair and CEO Steve Sanghi’s total granted compensation jumped to $21.4 million following his return as chief executive in late 2024, driven largely by stock awards. 

Weak governance has made real estate another flashpoint. In the first half of 2025, 2.5% of “say on pay” plans in the sector failed to reach 50% support, the highest rate of any industry examined by DMI. 

“The real estate industry is not known for great governance, so it’s not surprising to see persistent opposition,” noted Main. Land and Buildings is one activist to have honed in on the issue with its founder Jonathan Litt urging shareholders to vote against pay packages at 10 companies this year alone.

Litt has argued that many real-estate boards skew their peer comparisons to justify inflated compensation packages for CEOs at smaller or under-performing companies. “A CEO of a company and their compensation committee will say, ‘We want to pay this guy a lot of money, so let’s create a peer group of other CEOs who also get paid a lot of money,’” Litt stated in a June podcast. He cited a study of 59 REITs in which 15 consistently under-performed while compensation remained largely undiminished. 

While some sectors have seen consistent opposition, or a lack of it, opposition in others appears more cyclical. 

In 2021, more than 6% of “say on pay” proposals failed in the energy sector, driven in part by concern over a failure to meet environmental guidelines. Context is everything; Marathon Petroleum faced one of the largest pay defeats in the S&P 500 index that year, with nearly 70% of votes cast rejecting its compensation plan. The Teamsters union led the “vote no” campaign, citing a $6 million stock award granted to former Chair and CEO Gary Heminger soon after his retirement. The backlash followed layoffs affecting 12% of employees and $2.1 billion in CARES Act tax benefits. DWS Investment also pointed to “ESG controversies,” including opposition to climate legislation and alleged violations of indigenous rights linked to the Dakota Access Pipeline. But with ESG no longer resonating with investors at the same level, there have been no such failures since 2023. 

A similar pattern played out in healthcare where opposition peaked in 2022 when 4.5% of pay plans failed. Biotech was especially vulnerable that year, accounting for half of the 59 healthcare companies that saw opposition of 20% or more. Much of that dissent was linked to disappointment over stock performance in a sector that had seen a rush of IPOs in previous years. According to BioIndustry Association Finance Report 2022, of the 226 biotechs that held IPOs on Nasdaq Stock Market from the start of 2020 through to November 2022, 80% were trading below the offer price. 

With the Russell 3000 delivering total shareholder returns of 24% in 2024, investors have been more supportive of pay seen to be designed within established guardrails. 

However, as markets shift, investors may grow less forgiving of outsize awards in underperforming sectors. “This has been an AI-driven bull market, with big disparities across industries,” said Main. “That will likely translate into more variation in ‘say on pay’ outcomes next year, some more failures, and more companies in that 50% to 70% danger zone.”

IN-DEPTH: Shareholder pay votes reveal sector divide  

In today’s public sector organizations, efficiency is not just a goal, it’s essential. Every school district, college and local government is expected to deliver more with fewer resources, while upholding transparency and public trust. Purpose-built for the unique needs of public sector organizations, Diligent Community offers integrated digital tools that streamline operations and reduce manual administrative work so teams can focus on their core mission.

From automated agenda creation and custom approval workflows to AI-powered meeting minutes and real-time notifications, every feature is built to simplify governance and save time. 

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“Some of our family members like not only to watch and see what’s going on, they like to follow the guide, they like to see the agenda and understand what were the conversations that took place as we’re making decisions.” Dr. R.J. Gravel, Superintendent, Glenbrook High School District 225

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Whether you’re an administrator, board member or leader, Diligent Community puts smarter digital tools at your fingertips, to help you operate at peak efficiency and focus your time and energy on what matters most.

If you have any questions or need support implementing these features, don’t hesitate to reach out to your Customer Success Manager. They’re here to help you get the most out of your software investment and uncover even more ways to drive value for your organization. We are here to help make sure your governance tools are working as hard as you do.

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This article originally appeared in our October 23rd edition of the Diligent Minute Newsletter. For more insights like these, delivered straight to your inbox, subscribe

After months of buzz in the third quarter of 2024, many expected 2025 would finally spark a wave of IPOs and breathe new life into public markets. Instead, mounting economic pressures and sudden shifts in U.S. fiscal and trade policy have forced companies to reconsider even their most basic transaction strategies. Traditionally, when IPO activity slows, mergers and acquisitions pick up the slack. But this year, deal-making has slowed, raising a critical question for organizations everywhere: are they genuinely prepared for transactions in this climate?

2025 IPO slowdown and M&A outlook: Transaction readiness under pressure

We surveyed over 230 chief financial officers, general counsels and directors

 from public and private companies around the world about their growth strategies and transaction plans in this uncertain landscape, in partnership with Wilson Sonsini, 

, CFO Alliance, and the CFO Leadership Council. Here’s what they had to say:

Nearly half of organizations stay the course, with caveats

Interestingly, we found that nearly half of organizations (49%) are still prioritizing M&A or strategic partnerships in their growth strategies. “[Companies are] taking much longer to evaluate deals and are being more selective about opportunities,” NetSuite’s Ranga Bodla, Vice President of Field Engagement and Marketing at NetSuite explains.

Geopolitical uncertainty accounts for some of this hesitancy. Thirty-five percent of the senior leaders we surveyed cited it as a major challenge when it comes to their transaction plans. But many companies just don’t feel ready for complex transactions right now, calling out increased caution, adjusted valuation models and financial projections, and enhanced focus on due diligence and risk as their responses to economic uncertainty.

Confidence in organizational readiness to support a major transaction right now ranks just 5.7 on a scale from 1 to 10, even as 

 say they are prioritizing M&A or strategic partnerships in their game plans for growth. 

“We need to strengthen our governance structures to suit the current VUCA [volatility, uncertainty, complexity, ambiguity] environment,” one survey respondent bluntly declares.

Over half (56%) cited limited resources, over one third (35%) data access, and over one quarter (28%) a lack of experienced personnel as challenges in the transaction process, with many also calling for better defined roles (42%) and stronger board communication and support (31%).

Close the readiness gap: Integrated GRC, finance and AI to accelerate due diligence

But here’s what stuck out as a red flag to me: A mere 4% of organizations reported having fully integrated governance, risk compliance (GRC), and finance systems for transactions. Just 5% use 

, 10% financial reporting tools, 16% ERP software and 20% secure data rooms. All of these technologies can bolster 

, valuations, analysis and planning, and help companies learn about and act on deal opportunities faster. In fact, a full 60% still operate with siloed or only partially integrated platforms.

“Many organizations remain stuck in analog transaction processes,” my colleague Nithya Das, General Manager and Chief Legal Officer at Diligent, said. “Technology adoption directly addresses the operational risks companies frequently cite.”

In short, insufficient tools are holding too many corporate deal teams back, and inefficient processes are slowing them down.

If 2025 has taught us anything, it’s that you can’t control the external environment your organization operates in. But you can adapt to it, think proactively, and get your internal processes in order to support and prepare for transactions. “Companies can do a lot of things day-to-day to improve readiness for a potential transaction,” notes Rich Mullen, Partner at Wilson Sonsini.

Think digital workrooms that engage internal stakeholders and external advisors in activities from onboarding to planning.

Collaboration workflows that standardize due diligence and keep it on track. Secure communications channels for sensitive information, along with records, checklists, playbooks, and “lessons learned” logs stored in one centralized place. “Transaction readiness requires integrated preparation across people, processes, and technology,” Nithya reminds readers.

Nick Araco, CEO of the CFO Alliance, said that “the most effective finance leaders are turning the discipline of transaction readiness into a year-round capability.”

He explains how these leaders are “integrating lessons learned into their planning cycles and building internal muscle for deal execution. We’re also seeing growing interest in how AI can accelerate diligence, flag risks earlier, and free teams from manual work so they can focus on value creation.”

That’s a sentiment we apply to financial modeling, data analysis, enhanced due diligence and more in our report. As Bodla concludes: “The organizations that invest in these technological capabilities now will be better positioned to move quickly and confidently when the right opportunities arise.”

Delve into the details — and step up your own game for deal preparation — by downloading the full analysis: “

Ready or not: How companies are rethinking transactions in a volatile market

Ready for the deal: Transaction readiness in turbulent times

, highlights a market navigating uncertainty with increased caution and deeper due diligence. Yet, a critical statistic suggests many companies are overlooking a key aspect of preparedness: only 4% have fully integrated their governance, risk, and compliance (GRC) with their financial systems.

This disconnect points to a larger issue. True readiness today extends beyond financial metrics to encompass a company’s operational resilience, long-term risk management, and cultural strength. The ability to manage these non-financial factors is a direct indicator of a company’s capacity to execute a successful transaction.

The report finds 40% of organizations are enhancing due diligence as a result of economic turbulence. In the current landscape, this diligence must assess a target’s holistic health. This includes operational risks like supply chain resilience, the strength of its corporate culture and employee morale, and the robustness of its compliance frameworks. A target that lacks control in these areas presents significant hidden liabilities that can impact valuation and post-deal integration.

Siloed GRC and financial systems can be a major red flag in a merger or acquisition because it shows a lack of ability to manage the broad set of data that defines a company's value and risk profile. When leaders prioritize “enhancing data quality,” they are speaking to the need for a unified view of performance. Acquirers now scrutinize a target’s environmental liabilities, social capital (like culture and employee relations), and governance structures. Companies that have mastered this can quickly respond to intense due diligence requests, demonstrating a level of operational discipline that builds confidence with partners and investors.

Successful integration demands cultural alignment

A significant challenge noted in the report is integrating new entities. Lasting success requires more than combining systems; it requires merging cultures and operational philosophies. Leaders must proactively plan for this cultural integration, ensuring shared values and practices to retain talent and achieve synergies. The best practice of using dedicated integration teams must be applied to these non-financial factors to ensure a smooth transition. 

The finding that only 42% of boards are deeply involved in transaction strategy reveals a gap. A board that provides rigorous oversight of material sustainability issues is inherently better equipped to guide a deal through today’s complexities by asking questions about long-term resilience: How durable is our business model? How strong is our talent pipeline? How adaptable are we to regulatory change? Asking tough questions about long-term resilience, not just short-term financials, is the mark of a transaction-ready leadership team. This broader perspective is essential for approving deals that create sustainable, not just immediate, value.

Transaction readiness is a measure of overall organizational health. The question for leaders is: Can we demonstrate strength not only in our financials but also in our operational integrity and cultural resilience?

As you assess your organization’s transaction readiness, evaluate your capability to manage and report on the full spectrum of social impact and sustainability governance factors. Building the systems and disciplines to manage this complete picture is the ultimate preparation for the opportunities and challenges ahead.

Diligent

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IN-DEPTH: Shareholder pay votes reveal sector divide

5 efficiency-boosting features on Diligent Community

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