Pay Proposal
Advocates Get New Allies
By ELLEN SIMON 07.18.07, 4:46 PM ET
NEW YORK - Investors advocating for a greater shareholder voice on
executive compensation are getting a few new allies and a lot more
willing listeners.
Mutual fund company AIM Investments quietly changed its proxy voting
guidelines earlier this year. The company, which had $149 billion in
assets under management as of the end of March, has been criticized by
advocates in the past as lax on executive pay.
But its new guidelines now say it will support shareholder proposals
that give investors an advisory vote on executive pay. The proposals,
known as "say on pay" proposals, were one of the hottest issues during
the recently ended proxy season.
And EMC Corp., a data storage company based in Hopkington, Mass., has
joined a working group on executive pay that is hosting a conference
Thursday at Pfizer Inc. on say on pay proposals.
The companies in the group, which include Pfizer, Intel Corp.,
Bristol-Myers Squibb Co., Schering-Plough Corp., American
International Group Inc., JPMorgan Chase & Co. and Colgate-Palmolive
have been meeting this year with the American Federation of State,
County and Municipal Employees and Walden Asset Management to discuss
shareholder approval of pay packages.
The group expects about 150 company representatives, investors,
lawyers and experts to attend Thursday's conference.
Say-on-pay proposals passed at only a handful of companies, including
Blockbuster Inc., Verizon Communications Inc. and Motorola Inc. this
proxy season. But corporate governance expert Stephen Davis, of Davis
Global Advisors Inc. in Madison, Conn., said the average votes in
their favor - 40 percent at seven companies where AFSME made
say-on-pay proposals - was "an unheard-of high for an idea in its
first innings."
In January, financial institutions with an aggregate of $1.5 trillion
under management wrote the Securities and Exchange Commission
advocating a say on pay vote. The same group sent a letter Friday to
Sen. Christopher Dodd, chairman of the Senate Banking Committee,
asking for his "renewed attention" to the matter.
A say-on-pay proposal passed the House in April and is now before the
Senate Banking Committee.
Daniel Summerfield, senior adviser for responsible investment at the
Universities Superannuation Scheme, the United Kingdom pension fund
for college professors, said, "The only people conspicuous by their
silence at the moment are the SEC (Securities and Exchange Commission)
and other regulatory parties."
Copyright 2007 Associated Press. All rights reserved.
