Financial Times (May 5)
“A wave of shareholder insurrection is going through the corporate world…. In the past three weeks, managers have faced rebellions against executive pay packages at UBS, Citigroup, Credit Suisse, Barclays, Xstrata, Aviva, Trinity Mirror, and Inmarsat…. This ‘shareholder spring’ has, like the Arab version, cost executives their jobs.” Shareowners are finally “waking up to the fact that ‘pay for performance’ too often translates into pay without the performance to match.” Non-binding “say on pay” votes are shaking things up, but “shareholders deserve more clout. Approval votes on executive pay should be made binding.”
“A wave of shareholder insurrection is going through the corporate world…. In the past three weeks, managers have faced rebellions against executive pay packages at UBS, Citigroup, Credit Suisse, Barclays, Xstrata, Aviva, Trinity Mirror, and Inmarsat…. This ‘shareholder spring’ has, like the Arab version, cost executives their jobs.” Shareowners are finally “waking up to the fact that ‘pay for performance’ too often translates into pay without the performance to match.” Non-binding “say on pay” votes are shaking things up, but “shareholders deserve more clout. Approval votes on executive pay should be made binding.”
Tags: Binding, Executive pay, Non binding, Say on pay, Shareowners
New York Times (May 2)
“Nearly two years after the passage of Dodd Frank, say-on-pay is slowly emboldening investors to question executive pay, most prominently this year at Citigroup, where shareholders recently rejected a $15 million pay package for the bank’s chief executive, Vikram Pandit.” But another Dodd Frank provision has yet to be introduced. The pay-gap provision would require companies to report CEO compensation as a ratio of the company’s median pay. “The delay is disturbing.” The SEC needs to implement this requirement promptly. “The pay-gap ratio is crucial to determining whether executive compensation is excessive and to judging the effect of pay gaps on company performance and the broader economy.”
Financial Times (April 18)
In the U.S., ‘say-on-pay’ votes were first required last year. On Tuesday, Citi’s shareholders voted down the proposed compensation package, becoming “the first big US bank to suffer majority dissent in a ‘say-on-pay’ vote and only the 12th S&P 500 company to lose such a ballot.” Citi joins a growing list of companies where shareholders rejected proposed compensation. “Last year 41 companies in the Russell 3000 – including Hewlett-Packard, Jacobs Engineering and Stanley Black & Decker – failed to receive majority support in such votes.”
In the U.S., ‘say-on-pay’ votes were first required last year. On Tuesday, Citi’s shareholders voted down the proposed compensation package, becoming “the first big US bank to suffer majority dissent in a ‘say-on-pay’ vote and only the 12th S&P 500 company to lose such a ballot.” Citi joins a growing list of companies where shareholders rejected proposed compensation. “Last year 41 companies in the Russell 3000 – including Hewlett-Packard, Jacobs Engineering and Stanley Black & Decker – failed to receive majority support in such votes.”
Tags: Citi, Compensation, S&P 500, Say on pay, Shareholders, U.S.
Pensions & Investments (June 13)
“Say on pay” is helping governance grow up in the U.S. In the past investors upset over executive compensation might withhold votes for each member of the compensation committee. Now that they can directly vote against the compensation packages, corporate directors are being re-elected at the highest level of approval (95.3%) in half a decade. As Anne Simpson of CalPERS stated, “We’ve seen less megaphone diplomacy…. But we’ve seen a significant increase in real conversation, real dialogue” between shareholders and companies.
Tags: CalPERs, Compensation, Directors, Governance, Say on pay, Shareholders, U.S.
Boston Globe (October 8)
The Globe points to “a distressing pattern for executive pay.” It always goes up. “In the economic-meltdown year of 2009, CEO salaries at publicly traded companies based in Massachusetts rose by a cushy 8 percent, even as many of the companies suffered disappointing returns.” In the future, the CEOs will ask for another raise when profits improve. Executive pay has become detached from executive performance. The Globe calls on shareholders to exercise their say-on-pay votes to correct the situation.
Tags: Executive pay, Say on pay, Shareholders
