CEO compensation: Say-on-pay momentum stalls Posted on May 28th
Not long ago, the moment seemed ripe for shareholder activists to wring some of the excesses out of executive pay packages.
An election year marked by rising populist sentiment and a litany of economic woes—tumbling stock prices, declining real wages for most workers—set the stage for a lively annual meeting season. Resolutions proliferated at companies, including Abbott Laboratories and Motorola Inc., to give investors non-binding votes on how executives are paid. All three presidential candidates—Sens. Hillary Clinton (D-N.Y.), Barack Obama (D-Ill.) and John McCain (R-Ariz.)—said they favored legislation making such advisory votes mandatory.
Yet about halfway through the shareholder voting season, support for advisory pay resolutions is running about the same as last year, an average of about 43 percent, according to RiskMetrics Group. At 10 of 16 companies where say-on-pay proposals were considered for a second consecutive year, they received fewer votes.
“There definitely was an expectation that momentum was going to continue to grow,” said Carol Bowie, head of RiskMetrics’ Governance Institute. “Instead it seemed to have stalled. [But] it would be premature to say the issue is over and gone.”
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