Triennial Pay Vote Proposals
Submitted by: Rosanna Weaver Landis, Compensation
Ed Durkin, the union’s director of corporate governance, said the Carpenters’ pension fund decided to withdraw its triennial resolutions after the U.S. House of Representatives approved legislation on July 30 that would require public companies to hold annual “say on pay” votes. The Senate likely will consider the issue in the coming months. Two of the Carpenters’ proposals were successfully challenged by companies at the SEC.
“We thought that it wasn’t appropriate at this time to put these [proposals] to a vote,” Durkin said. “We’ll spend our energy and focus on the legislative side.”
“Most companies indicated that [triennial votes] were a better formulation. A fuller vote makes for a better process,” he said.
Durkin said the vote results from the mandatory advisory votes held at TARP firms this year “reinforce our belief that annual votes would be a mindless process.”
While the financial industry has performed poorly in the past year, most management advisory vote proposals received wide support in 2009. For the 141 companies for which RiskMetrics has vote data, an average of 88 percent of votes were cast in support of the management resolutions.
“It is a process that does not allow for thoughtful analysis and voting,” Durkin said of annual advisory votes. “It is going to turn into a ratification process,” particularly if votes are held at an even larger number of companies, he noted.
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