For Immediate Release
Monday, May 04, 2009
Say on Pay Shareholder Proposals Garner Record Support During Tumultuous Shareholder Season
Say on Pay shareholder proposals have gained new momentum in the wake of recent financial scandals, excessive compensation and shareholder anger at high profile corporations such as AIG, Bank of America and Citigroup.
Washington, D.C. —Say on Pay shareholder proposals have gained new momentum in the wake of recent financial scandals, excessive compensation and shareholder anger at high profile corporations such as AIG, Bank of America and Citigroup.
Shareholders are passing shareholder proposals for a non-binding advisory vote on executive compensation at an unprecedented rate of more than one in three companies. With 29 Say on Pay proposals voted on since the start of the 2009 shareholder season, ten have received a majority of the votes cast (out of FOR and AGAINST votes). These 29 proposals have averaged more than 46 percent support, and this level of support is expected to increase as companies release their final voting numbers. Approximately 80 Say on Pay shareholder proposals are expected to be voted on this year.
Say on Pay proposals averaged 42 percent in 2007 and 43 percent in 2008. Last year, out of 79 proposals, 11 proposals received majority support.
“Shareowners are angry, and we are starting to have an impact,” said Gerald W. McEntee President of the American Federation of State, County and Municipal Employees. “These exceptional votes are sending a clear message that shareholders need to be heard on executive pay.”
“Shareholders are urging boards to provide a platform to send feedback on executive compensation policies and practices,” says Timothy Smith, a senior vice president at Walden Asset Management. “Say on Pay as well as expanded communications programs combine to let boards know of investor views on irresponsible perks or pay that is not linked to real performance or poor reporting on pay.”
To date, majority Say on Pay votes have been recorded at Apple, Edison International, Hain Celestial, Honeywell, KB Homes, Lexmark International, Marathon Oil, Pfizer, Valero Energy and Waddell & Reed Financial. In response, Lexmark and Apple have each agreed to adopt an annual shareholder vote on executive compensation.
All companies receiving Troubled Asset Relief Program (TARP) funds are required to give shareowners an advisory vote on compensation this year. Meanwhile, the number of non-TARP companies that have agreed to give shareowners an actual advisory vote on executive pay stands at 22 and continues to grow. These companies include Ingersoll-Rand, Intel, Motorola, Occidental Petroleum and Verizon.
Additionally, companies where Say on Pay shareholder proposals will be voted upon in the coming weeks include CVS Caremark, Chevron, Colgate Palmolive, ConocoPhillips, Exxon Mobil, Home Depot, McDonald’s, Pepsico, Qwest, Raytheon, Target, UnitedHealth and YUM! Brands.
A diverse network of over 70 institutional and individual investors — comprised of public pension funds, labor funds, asset managers, individual investors, foundations and religious investors — filed shareholder resolutions at over 100 U.S. corporations as part of 2009 proxy season efforts to press companies to give shareowners an annual advisory vote on executive compensation packages. This unique investor network started in 2007 and is organized by the AFSCME Employees Pension Plan and Walden Asset Management, a division of Boston Trust & Investment Management Company.
