APRIL 23, 2009,
3:03 P.M. ET
Approve Say-On-Pay; J&J's Say No Thanks
By Peter Loftus
Of DOW JONES NEWSWIRES
Pfizer Inc.'s (PFE) shareholders voted
Thursday in favor of giving themselves an advisory vote on executive
compensation at the drug giant, while shareholders at rival Johnson &
Johnson (JNJ) defeated a similar proposal.
The shareholder proposals were part of a push
among some investors -- and lawmakers -- for "say on pay" at publicly traded
companies. Advocates say such advisory, non-binding votes are needed to give
voice to frustrations about hefty compensation packages awarded even when
companies perform poorly.
At Pfizer's annual shareholders meeting in
Atlanta, a say-on-pay proposal garnered support from 52.4% of shares voted,
versus 47.6% against, according to a preliminary tally released by the
The proposal requests that Pfizer's board
adopt a policy allowing shareholders to vote annually on an advisory
resolution ratifying the compensation of top executives. The vote would be
non-binding and wouldn't affect any compensation paid or awarded to the
Pfizer's board had recommended against the
proposal. Chief Executive Jeffrey Kindler said the New York company held
regular discussions with shareholders about executive compensation. An
advisory vote wouldn't provide the board with enough information to address
specific concerns, he added.
Kindler also defended his and other top
executives' compensation. He noted that his combined salary and bonus have
been essentially frozen, and his long-term incentive compensation is tightly
linked to increasing shareholder value.
Kindler's total compensation, as calculated
under regulatory reporting requirements, rose to $13.8 million in 2008 from
$9.5 million in 2007. But measured another way, which Pfizer called "total
direct compensation," Kindler's pay package declined 5% to $13.1 million for
Pfizer shares declined 22% in 2008 and have
fallen an additional 26% this year, trading recently at $13.05, weighed down
by actions taken in connection with its planned acquisition of Wyeth (WYE),
including a 50% dividend cut. Kindler on Thursday defended the dividend cut
as necessary to help fund the Wyeth deal.
A majority of Pfizer shareholders also voted
in favor of asking the board to give holders of 10% of shares outstanding
the power to call special shareholder meetings, down from the 25% threshold
adopted by the board last year.
"Certainly we understand that given the
preliminary results, these topics are very important to shareholders,"
Pfizer spokeswoman Joan Campion said. "And our board will carefully consider
these proposals and the appropriate actions."
The J&J say-on-pay proposal sought an
advisory shareholder vote annually to ratify and approve a report from the
board's compensation committee and executive compensation policies. The
board opposed the measure. Some 46% of J&J shareholders approved the
proposal, while 54% opposed it at an annual meeting near the company's New
Brunswick, N.J., headquarters.
Though the proposal was defeated, J&J Chief
Executive William Weldon acknowledged the level of support it received, and
told shareholders that J&J would continue to monitor developments in
J&J's compensation committee had recommended
a merit salary raise for Weldon this year based on 2008 performance, but he
recommended it stay unchanged due to the economic weakness. Weldon's total
compensation as calculated under regulatory requirements declined by about
4% to $29.4 million for 2008 from $30.6 million the year before.
J&J shares fell 10% in 2008 and are off
nearly 15% year-to-date, trading recently at $51.05.
-By Peter Loftus; Dow Jones Newswires;
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