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Timothy Smith, whose comments are presented below, is a Senior Vice President and Director of Socially Responsive Investment for Walden Asset Management, a division of Boston Trust & Investment Management Company.

In his introductory sentence, Mr. Smith refers to a  "remarkable story today" which he identified in his cover note as the following "NYT story [that] reflects expanding anger and frustration about executive pay reaching to the highest level of government:"

For links to the referenced draft of Professor Gordon's paper and other comments, see

Mr. Smith had also offered comments on Professor Gordon's initial July 2008 draft addressing "Say on Pay" issues.



Comments of

Timothy Smith

January 30, 2009


To Forum Colleagues:

I have been meaning for some time to write a comment on the thoughtful exchanges with Prof. Gordon, Peter Clapman et al. Perhaps this comment based on a remarkable story today might be useful commentary.

I believe the debate has now moved beyond the smaller details of the Advisory Vote and its feasibility. There have been some reasonable questions raised about the implementation of an Advisory Vote, the capacity of investors to respond thoughtfully to such votes, the role of the proxy advisory organizations.

But I believe proponents and skeptics alike should move forward in our discussion and assume the obvious. The Advisory Vote will be a part of reforms promulgated on exec comp, it will be a reality, it will soon be on proxy statements for annual votes just like Election of Directors or Ratification of the Auditors (which occurs with an increasing number of companies).

For company skeptics it may be wise to assume this reform will be a new reality and to stop and assess whether being a vigorous public opponent either individually or via the BRT or Chamber of Commerce is the wise thing to do. Wouldn’t diplomacy dictate that companies reassess damage to their public reputation by opposing this change?

For example a number of companies will have the Advisory Vote shareholder resolution on their proxy this spring and will oppose it asking investors to vote against it. Votes will likely be in the 40% to 55% range in favor indicating that investors want this reform.

Many companies argue “There are lots of abuses in the system but we are not one of the companies that have a history of problems. We don’t deserve this resolution though others do.” But public sentiment has moved far beyond that argument “we don’t deserve it”. Maybe you weren’t a company with auditing scandals either but you likely support ratification of the auditors. There is an urgent public demand for reforms related to exec comp and companies that publicly push back against such reform will be held accountable just as companies that have huge exec comp problems will become public targets .


Timothy Smith

Senior Vice President

Environment, Social and Governance Group

Walden Asset Management

33rd floor, One Beacon St.,

Boston, MA. 02108






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