Good Thursday morning from TX - it's June now, and the heat is doing exactly what you'd expect.
-Jake
1. EU Pay Transparency Directive deadline hits Saturday, and most of Europe isn't ready
What's happening: The deadline for EU member states to transpose the Pay Transparency Directive into national law lands this Saturday, June 7. The European Commission confirmed in December that the deadline is firm and no postponements will be granted. As of late May, only Slovakia and Italy have fully transposed.
State of play:
23 of 27 member states have active legislation in progress, but most will not land before the deadline, Littler reports.
The Netherlands and Denmark have announced they will miss it and are targeting January 2027.
Ireland publicly confirmed it will miss the June 7 date.
France is targeting September 2026.
Member states that miss the date face infringement proceedings from the European Commission and potential financial penalties from the European Court of Justice.
2. 2026 proxy season ends with 6 say-on-pay failures, a 219:1 pay ratio, and female CEOs out-earning male CEOs
What's happening: The 2026 proxy season wrapped this past week. Average say-on-pay support across the Russell 3000 came in at 92.3%, per ISS-Corporate, running higher than the 91.0% three-year average. Six companies failed their say-on-pay vote, per Boardroom Alpha, versus an average of 12 through the same point in 2023 to 2025.
State of play:
IQVIA Holdings, Skyworks Solutions, and Arrowhead Pharmaceuticals are among the failures, each with a market cap above $10 billion.
38 companies landed in the 50% to 70% support zone that proxy advisors treat as a revolt warranting board engagement.
The median CEO pay ratio rose to 219:1 in 2025 data, up from 210:1 in 2024, a 4.3% increase.
Median pay for female CEOs reached $17.6 million, ahead of male CEOs at $16.6 million, for the second consecutive year.
Of note: "Pay-for-performance alignment, particularly in light of recent results" is the focus area Glass Lewis and ISS are flagging for 2027, per Mercer's review of the 2026 voting policies. The 2026 numbers held up better than expected. The 2027 cycle is where AI-era performance metric design lands on comp committee agendas in earnest.
🗞️ Quick Reads
🩺 Mercer projects 6.5% total health benefit cost growth for 2026, the highest in 15 years, with average per-employee cost crossing $18,500. Aon goes higher at 9.5%, putting per-employee cost above $17,000. WTW landed at 9.1%, the steepest in two decades. Comp and benefits teams are running 2027 plan modeling now, with GLP-1s, specialty pharmacy, and cancer treatment driving the top of the curve.
📋 Virginia's pay transparency law takes effect July 1, requiring salary range disclosure in postings. Maine's took effect January 1 for employers with 10 or more employees. As of June, 16 states plus DC have active wage transparency requirements covering roughly half the US workforce, per Jackson Lewis. Delaware's law, signed in September 2025, takes effect September 2027 for employers with 25 or more employees.
🤖 Gartner on April 22 warned HR leaders that AI is breaking three foundations of pay for performance: a clear philosophy, fair assessment, and meaningful differentiation. The tension: if managers can't explain how AI influenced a pay decision, trust in fairness collapses. The pivot Gartner is pushing is governance-first AI adoption, not feature-first.
⚖️ The EEOC secured $660 million for workers in FY 2025, with $528 million from pre-litigation settlements. Sex or pregnancy discrimination was the most-alleged basis (42 cases), with pay equity, promotions, and leave-return handling as the recurring fact patterns. The University of Denver Law School pay equity case settled with a six-year consent decree, $2.66 million to seven female full professors, and an obligation to publish annual salary data and hire a labor economist for pay equity studies.
One More Thing: Employers to GLP-1 makers: the coverage math is breaking.
What's happening: A run of large employers, including health systems insuring their own workforces, are pulling or capping GLP-1 weight-loss coverage. RWJBarnabas Health, Ascension, and Hennepin Healthcare discontinued GLP-1 weight-loss coverage entirely, while Mayo Clinic imposed a $20,000 lifetime cap on weight-loss medications through its employee plan. Covered enrollees across the employer market fell from 3.6 million in 2024 to 2.8 million in 2026.
The argument: "Of those offering the coverage, only 72% said they were likely to do so in 2027, and 10% said they likely wouldn't," reports MedCity News, citing employer survey data. Rebate erosion is the proximate cause. Several benefits managers cited rebate quality collapsing and made the call to pull the entire weight-loss category.
The recommendations: Mercer's GLP-1 brief for 2026 lays out the middle path most employers are taking instead of full exclusion: tighten clinical eligibility against objective biometric data, require participation in an integrated weight-management program, restrict prescribing to a named provider panel, and exclude specific SKUs from the formulary. Novo Nordisk's announced January 2027 list price of $675 a month for Wegovy, Ozempic, and Rybelsus will reshape the math again, but not in time for 2027 plan design.