Last updated: April 29, 2012 11:25 pm
NYSE vote reflects pay discontent
By Telis Demos in New York
Only a small
majority of shareholders voted in favour of the pay of top executives at
NYSE Euronext, the global exchange operator, in the latest sign of
rising shareholder discontent with executive pay.
Nearly 43 per cent
of shareholders voted against approving the group’s executive pay at the
annual meeting on Friday, according to a company statement. Just 0.5 per
cent of shareholders abstained. The “say on pay” vote, adopted last year by
shareholders, is non-binding.
policies were voted down at
International Game Technology, and two other US groups this year. Other
such as Barclays in the UK, have faced significant investor unrest on
the issue in recent weeks. However, only 9 per cent of the 262 US companies
in the Russell 3000 index that have held “say on pay” votes this year
received less than 70 per cent support, according to a
survey last week by Semler Brossy, an executive compensation
consultancy. Nearly three-quarters have received 90 per cent support.
Going into the
vote at NYSE Euronext, proxy advisers Glass Lewis and Institutional
Shareholder Services both expressed concern that the $9m Duncan Niederauer,
chief executive, received in 2011 in base salary and bonuses did not match
the group’s performance. ISS said his pay was 1.8 times the median in NYSE’s
The company has
responded by arguing that the peer group of other exchanges considered was
not a fair one, given NYSE’s shift to becoming more of a branded technology
company, and that total shareholder return was not a sufficient measure of
the group’s performance.
like other exchanges, is trying to stem a decline in trading activity.
Though a proposed merger with
Deutsche Börse failed, the board has said it is
sticking with Mr Niederauer as it expands into US futures trading,
European clearing and global technology via its data centres. The company
has set a target of $1bn in tech turnover by 2015. “We are grateful that our
shareholders have approved the say-on-pay advisory resolution, mindful of
the fact that there are some reservations, and we will continue to engage on
this matter and others,” NYSE Euronext said.
Already, NYSE has
already made several changes to its
2012 pay policies. Mr Niederauer’s change-in-control “tax gross up”,
which would have been activated by the merger, was eliminated. NYSE also
included a new “formulaic performance-based element”.
received 89 per cent of shareholder votes in support of his board
been a sensitive matter for the New York Stock Exchange in recent history.
In 2006 a former chief executive, Richard Grasso, was forced to return pay
by Eliot Spitzer, the then-New York state attorney-general.
The Financial Times Ltd 2012