PPG INDUSTRIES, INC. | CEO Compensation to Weigh Workforce Pay and Ownership at PPG INDUSTRIES, INC.

Status
9.84% votes in favour
AGM date
Proposal number
6
Resolution details
Company ticker
PPG
Lead filer
AFL-CIO Reserve Fund
Resolution ask
Other ask
ESG theme
  • Governance
ESG sub-theme
  • Remuneration or pay
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Materials
Company HQ country
United States
Resolved clause
Shareholders of PPG Industries, Inc. (the Company) request that when setting target amounts for CEO compensation, the Compensation Committee of the Board of Directors take into consideration the compensation of the Company’s employees and any other workforce that the Compensation Committee determines to be relevant to the Company’s business operations. Compliance with this policy is excused if it will result in the violation of any existing contractual obligation or the terms of any existing compensation plan.
Supporting statement
This proposal encourages the Compensation Committee to consider whether the CEO’s compensation is internally aligned with the Company’s compensation practices for its employees as well as the compensation of any other workforce that is relevant to the Company’s business operations. Under this proposal, the Compensation Committee will have discretion to determine how employee and other workforce compensation should influence CEO compensation. This proposal does not require the Compensation Committee to use worker compensation data in a specific way to set CEO compensation. Rather, it is a suggested enhancement to the Compensation Committee’s process for setting target amounts for the CEO’s compensation. Under this proposal, how the Compensation Committee would consider employee compensation and other workforce compensation is within its discretion. The Compensation Committee also will retain authority to consider any other information when setting CEO compensation targets. This proposal provides flexibility to consider the compensation of any other workforce that the Compensation Committee determines to be relevant to the Company’s business operations. For example, our Company has developed customer-facing digital technology platforms such as PPG Services for commercial businesses and Paintzen for residential customers. We believe that the workforces employed via these platforms are a material part of the Company’s value chain and therefore the compensation of these workforces is relevant information. Like at many companies, our Company’s Compensation Committee has used a peer group of what other companies pay their CEOs to set its target CEO pay. Over time, using peer group benchmarks as the primary measure to set CEO compensation targets can lead to pay inflation. Although many companies target CEO compensation at the median of their peer group, certain companies have targeted their CEO’s pay above median. In addition, peer groups can be cherry- picked to include larger or more successful companies where CEO compensation is higher. To ensure that our Company’s CEO compensation is reasonable relative to our Company’s overall compensation philosophy and structure, we believe that the Compensation Committee should also consider the compensation of Company employees and other relevant workforces when setting CEO compensation. We note that in 2020, the Company’s median employee compensation was $43,783 and the Company’s CEO to median employee pay ratio was 363:1. For those reasons, we urge you to vote in favor of this proposal.

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