A Fight Over "Say on Pay"
Ted Allen on April 6, 2010 4:40 PM
At Waddell & Reed Financial's annual meeting on Wednesday, investors will
consider a shareholder proposal that seeks an annual advisory vote on
The Kansas-based investment services company has taken the unusual step of
including a special solicitation with its proxy statement to oppose the
proposal. The resolution is sponsored by Boston Common Asset Management,
the California State Teachers' Retirement System, and Calvert Asset
Management. In a March 5 letter to shareholders, CEO Henry Herrmann warned
that adoption of this reform would put the company "at a serious
competitive disadvantage and could erode the value of your investment."
While more than 60 U.S. issuers, including JPMorgan Chase, Wells Fargo,
and Goldman Sachs, have agreed to hold voluntary pay votes, Waddell & Reed
argued that advisory votes would lead to a "loss of executive talent" and
would not result in "meaningful dialogue with shareholders."
Last year, the company initially reported that a "say on pay" proposal
received majority support; the company later petitioned a Delaware judge
for permission to count additional votes, which pushed the support level
below 50 percent. Pay vote proponents have been surprised by the company's
efforts to oppose this resolution.
"Waddell & Reed is one of the outliers in its aggressive campaign against
this important reform, and that concerns us as shareowners," said Dawn
Wolfe, associate director of ESG Research at Boston Common.