Most Investment Pros
Support Shareholder Vote On Pay -Survey
DOW JONES NEWSWIRES
April 2, 2007 12:07 p.m.
By Kaja Whitehouse
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--A majority of investment
professionals, including money managers and financial analysts, support
giving shareholders an advisory vote on executive pay plans as long as
it's not mandated through legislation, according to a new survey.
More than three-fourths of survey respondents, or 76%,
said they support shareholders sponsoring proposals that would give
investors a nonbinding vote on compensation packages. But 68% also said
they oppose requiring this through legislation.
The survey was conducted by the standard-setting unit
of the CFA Institute, a membership group for investment professionals,
including financial analysts and mutual fund managers. More than 2,235
of the CFA Institute's members have responded since the survey period
began March 13.
Advisory votes on pay are expected to be a big issue in
2007 as dozens of companies have been targeted with proposals this year,
up from a handful when the idea was first tested in 2006. Further
highlighting this issue, legislators have introduced a bill to formalize
this tactic at public companies, and the measure was approved by the
U.S. House Financial Services Committee last week.
Other investment groups have also come out in support
of these proposals this year, including TIAA-CREF, which manages money
for educational institutions, mutual fund firm T. Rowe Price Group Inc.
(TROW) and investment firm Walden Asset Management. In February, Aflac
Inc. (AFL) became the first company to announce adoption of this change,
saying it will give investors a nonbinding vote starting in 2009.
The group launched the survey to test its members'
support before deciding whether to officially recommending support for
this measure in its book of official positions, said James Allen, senior
policy analyst with the CFA Institute Centre for Financial Market
Integrity, the unit that conducted the survey.
"It's something we noticed seems to work or has done
some good in Britain and Australia," said Allen. "The hope is that
corporate boards will be better able to tie rewards, stock compensation,
as well as retirement, to performance."
-By Kaja Whitehouse, Dow Jones Newswires; 201-938-2243;
kaja.whitehouse@dowjones.com
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