This year’s first votes to determine whether shareholders can have a “say on pay” will take place Tuesday at the annual meetings of Bank of New York and Morgan Stanley. Should the measures pass, at future meetings investors will be entitled to cast a nonbinding, advisory vote on executive compensation at those companies.
Shareholders of United Technologies will weigh in on Wednesday. The following week, similar measures will be put to a vote 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. The ISS points out that the Securities and Exchange Commission has permitted a number of companies — including Burlington Northern Santa Fe, Bear Stearns, and Johnson & Johnson — to omit similar proposals, but adds that another 40 are pending.
The proxy-advisory firm also notes that a proposal submitted at Tyco, which held its annual meeting on March 8, was withdrawn after the company joined a “say on pay” working group.
Last year seven “say on pay” shareholder resolutions received an average 40 percent support, according to the ISS. And 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.