Human Capital & Careers

Warning-track Power for “Say on Pay”

On Tuesday, shareholders at two companies took a swing at winning an advisory vote on executive compensation but fell a little short.
Stephen TaubApril 11, 2007

In this year’s first votes to determine whether shareholders can have a “say on pay,” shareholders at Morgan Stanley and Bank of New York fell a little short.

Had the measures passed, at future meetings investors would have been entitled to cast a nonbinding, advisory vote on executive compensation. At Morgan Stanley’s annual meeting, however, the measure garnered only 37 percent support, according to Reuters; at Bank of New York, an oh-so-close 47.3 percent.

Even so, say-on-pay supporters must be heartened by the high vote totals. Indeed, the Associated Press noted that after BONY’s annual meeting, spokesman Kevin Heine said that the bank’s board of directors “will review and discuss the results of today’s vote.”

Shareholders of United Technologies will step up to the plate on Wednesday. Similar measures are on deck for annual meetings next week at U.S. Bancorp, Citigroup, Wachovia, and Coca-Cola.

According to Institutional Shareholder Services, more than 60 such proposals have been filed by union pension funds and other investors this year; 20 are scheduled for a vote this month alone. Last year seven “say on pay” shareholder resolutions received an average 40 percent support, according to the ISS.

One company, Aflac, has already agreed to institute an advisory “yes” or “no” vote on its overall pay package for top executives, starting in 2009.