The Shareholder ForumTM

reconsidering

"Say on Pay" Proposals

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"Say on Pay" Home Page

Program Reference

 

Public Interest Program

Forum Summary
"Say on Pay" Proposals
July 7, 2008

The Shareholder ForumTM has been asked by several participants to initiate a new program for reconsidering the “advisory voting” concepts defined in its 2006 project.[1]

When Forum participants first considered advisory voting, it was viewed as a process that could be adapted individually by corporate managers and investors as a foundation for constructive communication about common interests in a company’s success. Its subsequent transformation into a confrontational activist demand for legislatively imposed “Say on Pay” has necessarily raised important new questions:

  • If advisory voting is required for all publicly traded US companies, can investors satisfy their fiduciary responsibilities without increasing reliance on proxy advisors or other bureaucratized processes?

  • Will focus on conformance with "good governance" theories[2] distract both corporate and investor decision-makers from the essential purpose of compensation to reward competitive success?

  • Ultimately, will advisory voting help investors make better decisions about their allocations of capital?

These and other concerns are reflected in increasing marketplace uncertainty about advisory voting.  Recent news reports of declining support for “Say on Pay” proxy proposals[3] have been countered by RiskMetrics-ISS reports presenting statistics to show that their activist client network seemed to be making progress.[4] Academic research also reports significant divisions among investors, including between “governance” and investment representatives within fund managers, and further suggests that many of the governance professionals who advocate “compulsory” advisory voting view it as a means of increasing their influence.[5]

To address these issues, Sibson Consulting has supported the organization of this open Forum program to examine how “Say on Pay” might serve the public interest in essential marketplace processes of enterprise competition and capital allocation. Corporate, investor and professional representatives with recognized expertise in successful performance will be invited to support the program in an advisory panel that guides the Forum’s conduct of workshops, academic studies, surveys, open meetings or other processes as required for a full public review of the issues and a concluding report.

This Forum program is open, free of charge, to all marketplace decision-makers and the professionals who advise them, according to the Forum's standard Conditions of Participation

 

Program Panel (2009):

Douglas K. Chia, Johnson & Johnson

Hye-Won Choi, TIAA-CREF

Cornish F. Hitchcock, Hitchcock Law Firm and Amalgamated Bank

Bess Joffe, Hermes EOS       

Cary I. Klafter, Intel Corporation

Richard V. Smith, Sibson Consulting

Louis M. Thompson, Jr., Kalorama Partners  

 


[1] For background information about the project initiated in December 2006 as part of the Options Policies Forum program, see the Forum’s project reference page for “Advisory Voting.”

For results of mandated "Say on Pay" voting starting in 2011, see

Shareholder Support Rankings

graphs of votes in support of executive compensation for Russell 3000 companies

 


 

 

On this page:

Invitations to Comment

Compensation Issues

News Reports

Reports from 2006-2007 Program

For links to all reports and research material, go to

Program Reference Page

For subsequent reports of related investor communications issues, see the 2010 "E-Meetings" public interest program

 

 

Forum Survey Reports

December 14, 2009

Investor Voting Criteria

for Compensation Issues

and

October 6, 2010

Investor Communication Priorities

for Voting Decisions

 


 

 

October 20, 2010 Forum Report:

Responding to Investor Information Requirements

 


 

February 17, 2010 Forum Report

Progress of 2010 “Say on Pay” Projects

 

 


 

December 30, 2011

posting in the

Harvard Law School Forum on Corporate Governance and Financial Regulation:

Mary L. Schapiro

Chairman, U.S. Securities and Exchange Commission

"Say on Pay Leading to Better Communication About Compensation"

 

 

Invitations to Comment

July 23, 2009

Activist Concerns about Broad Application

see also

December 3, 2010

Frequency of "Say on Pay" Voting

 

April 22, 2009

Responsibility for Investor Communications

 

April 8, 2009

O’Byrne Analysis of Pay Correlation

 

March 30, 2009

RiskMetrics Analysis of “Say on Pay” Votes

 

March 13, 2009

Chia List of “Ten Things to Keep in Mind”

 

January 9, 2009

Gordon Proposal of Shareholder “Opt-In” Right to “Say on Pay”

 

December 15, 2008

Develop Questions about Compensation

 

 


 

Compensation Issues

 

Financial Times

May 27, 2012

"A ‘shareholders’ spring’ is not enough"

♦♦♦

New York Times

August 16, 2009

"The Quick Buck Just Got Quicker"

♦♦♦

Financial Times

June 18, 2009

"Outside directors: Wanted, fresh blood and ideas"

♦♦♦

Wall Street Journal

June 3, 2009

"SEC Ready to Require More Pay Disclosures"

♦♦♦

Washington Post (Associated Press)

May 2, 2009

"SEC considering change to CEO pay disclosure rules"

♦♦♦

New York Times

March 29, 2009

"Shareholders Who Act Like Owners"

♦♦♦

Financial Times

March 13, 2009

"A need to reconnect"

♦♦♦

Directors & Boards

February 23, 2009 republication of 1994 article

George M. Keller

(1924-2008, former Chairman and CEO of Chevron)

"Slow Down the CEO Gravy Train"

♦♦♦

Washington Post

February 8, 2009

"How Much Does Your CEO Really Make? Go Figure."

♦♦♦

Fortune

(as published by CNNMoney.com)

February 4, 2009

"Obama's pay plan doesn't go far enough"

"Observers say President Obama's new rules to limit executive

compensation won't put a stop to corporate excess"

See also subsequent reports

February 5, 2009 New York Times

February 5, 2009 San Francisco Chronicle

February 6, 2009 Investor Relations Magazine

February 7, 2009 Financial Times

February 7, 2009 Wall Street Journal

February 7, 2009 Harvard Corporate Governance Blog

February 8, 2009 New York Times

February 9, 2009 Bloomberg

February 9, 2009 Financial Times

♦♦♦

Financial Times

January 22, 2009

"Merrill paid bonuses as losses mounted ahead of sale to BofA"

See also

Columbia Journalism Review

January 23, 2009

"Thain the Vain"

and

Financial Times

January 26, 2009

"Top investor calls for Wall St ‘moderation’"

♦♦♦

New York Times

December 18, 2008

"On Wall Street, Bonuses, Not Profits, Were Real"

(part of series, "The Reckoning")

see also

Columbia Journalism Review

December 18, 2008

"NYT Putting It All Together on Wall Street Pay"

♦♦♦

Associated Press

(as published by San Francisco Chronicle)

December 14, 2008

"Wall Street compensation needs major overhaul"

♦♦♦

Wall Street Journal

November 20, 2008

"Before the Bust, These CEOs

Took Money Off the Table"

♦♦♦

Financial Times

November 13, 2008

"The president-elect wants a say on pay"

♦♦♦

New York Times

September 7, 2008

"If the Pay Fix Is in, Good Luck Finding It"

♦♦♦

Wall Street Journal

July 28, 2008

"Hiring a CEO From the Outside Is More Expensive"

"New Study Highlights Cost of Failing to Plan For Leader Succession"

 

 

 


 

 

Reports from 2006-2007 Program

 See related reports from previous program

June 18, 2008 Forum Report

Yale-Deloitte Report on Communications about Executive Compensation

and

June 25, 2008 Forum Report

Initial Comments on Yale-Deloitte Report

 

For other news and Forum reports

prior to July 2008, see

Advisory Voting Project

 

 

News Reports

MarketWatch

Opinion

July 16, 2015

"What you can do about obscenely high executive pay"

 

New York Times

Fair Game

May 16, 2015

"Shareholders’ Votes Have Done Little to Curb Lavish Executive Pay"

 

New York Times

Fair Game

October 12, 2013

"When the Stock Price Hides Trouble"

 

New York Times

Executive Pay Report

June 30, 2013

"An Unstoppable Climb in C.E.O. Pay"

Top1000Funds

April 10, 2013

"Swiss referendum: funds’ headache or investor utopia?"

New York Times

April 7, 2013

"If Shareholders Say ‘Enough Already,’ the Board May Listen"

IR Magazine

Inside Investor Relations

May 14, 2012

 "Say on pay: round two"

New York Times

April 8, 2012

"When Shareholders Make Their Voices Heard"

 

Bloomberg Businessweek

June 16, 2011

"Investor 'Say on Pay' Is a Bust"

"Shareholder votes rejected executive pay at

less than 2 percent of public companies this year"

 

Wall Street Journal

February 6, 2011

"Companies Fight Back on Executive Pay"

 

Wall Street Journal

January 25, 2011

"SEC, in Split Vote, Adopts 'Say on Pay' Rule"

 

Reuters

January 5, 2011

"Analysis: Companies tweak CEO pay packages ahead of vote"

 

New York Times

(editorial)

September 2, 2010

"The Real Say on Pay"

 

Associated Press

(as published by Bloomberg Businessweek)

May 10, 2010

"AP IMPACT: Market gains set up CEO pay bonanza"

 

Wall Street Journal

May 10, 2010

"Investors Start to Make Their Voices Heard on Pay"

See also

Wall Street Journal

May 7, 2010

"Investors Balk at Occidental Petroleum Pay Practices"

♦♦♦

Wall Street Journal

March 22, 2010

"Firms Use Third Party to Judge Executive Pay"

"Boards Tap Consultants to Bless Compensation Practices;

Critics Complain Companies Are Just Buying Good Marks"

♦♦♦

IR Magazine

January 19, 2010

"Investors want pay info from execs, not RiskMetrics"

see also

IR Magazine

March 1, 2010

"Insurer demands executive remuneration disclosure"

♦♦♦

Financial Times

January 14, 2010

"Siemens chairman to meet investors"

♦♦♦

Agenda

December 14, 2009

"Investors Outline Priorities for Voting on Comp Plans"

♦♦♦

Fortune

(as published by CNNMoney.com)

November 16, 2009

"Why 'say on pay' won't work"

♦♦♦

Agenda

October 26, 2009

"A Way Around Powerful Proxy Advisors?"

♦♦♦

IR Magazine

October 22, 2009

"Investors and directors call for say-on-pay dialogue"

♦♦♦

Financial Times

October 17, 2009

"A revival of fortunes"

and

"Countdown to next crisis"

♦♦♦

Agenda

September 28, 2009

"RiskMetrics: A Growing Problem for Boards?"

♦♦♦

Washington Post

September 26, 2009

"Shareholders Say Yes To Executive Pay Plans"

♦♦♦

Reuters

September 18, 2009

"Microsoft shareholders vote on exec pay"

♦♦♦

MarketWatch

September 14, 2009

"Compensation critics get new weapons"

♦♦♦

The Economist

August 6, 2009

"Regulating executive pay in America | Knotting the purse-strings"

See also

New York Times

August 9, 2009

"Imperfect Politics of Pay"

♦♦♦

New York Times

August 1, 2009

"House Approves Limits on Executive Pay"

See also

MarketWatch

July 28, 2009

"Key House panel approves say-on-pay bill"

and

Bloomberg

July 31, 2009

"U.S. Limits on Bank Pay, Bonuses Face Senate, Obama Skepticism"

♦♦♦

Reuters

July 22, 2009

"'Say on pay' rolls forward, but some investors wary"

♦♦♦

USA Today

July 17, 2009

"Proposal gives shareholders non-binding say on exec pay"

and

"CEOs openly oppose push for say-on-pay by shareholders"

See also subsequent

RiskMetrics/"ISS" Risk & Governance Blog

July 17, 2009

"Rep. Frank Releases Advisory Vote Legislation"

♦♦♦

New York Times

June 12, 2009

"House Panel Clashes Over Pay Restrictions"

see also

Wall Street Journal

June 10, 2009

"New Pay Guidelines Raise Questions"

♦♦♦

New York Times

June 8, 2009

"U.S. to Propose Wider Oversight of Compensation"

♦♦♦

Financial Times

June 2, 2009

"European investors balk at director pay"

♦♦♦

New York Times

May 17, 2009

"When a Company Tries It, a ‘Say on Pay’ Works"

♦♦♦

IR Magazine

May 13, 2009

"Carpenters target pay at Procter & Gamble and 19 others"

♦♦♦

Wall Street Journal

April 25, 2009

"Investors, Take Note: New Bill to Target Boards, 'Say on Pay'"

♦♦♦

IR Magazine

April 23, 2009

"Should IR have a say on say on pay?"

♦♦♦

Corporate Secretary

April 2009

(cover story)

"State of pay"

♦♦♦

Wall Street Journal

April 6, 2009

"Companies Seek Shareholder Input on Pay Practices"

♦♦♦

New York Times

March 20, 2009

"Regulators Worldwide Scrutinize Bankers’ Pay"

♦♦♦

Wall Street Journal

March 11, 2009

"RiskMetrics' Words Gain Currency"

♦♦♦

Wall Street Journal

February 27, 2009

"Hundreds of Firms Must Grant 'Say on Pay'"

♦♦♦

Wall Street Journal

February 13, 2009

"Shareholders Renew Push to Regulate Executive Pay"

♦♦♦

Wall Street Journal

January 28, 2009

"Intel Joins Move to Put Pay Plans to Vote"

♦♦♦

Investor Relations Magazine

January 2009

Editorial: "Swept up"

♦♦♦

Financial Times

January 6, 2009

"Fear of falling"

♦♦♦

Agenda

December 22, 2008

"Boards Prepare for Say-on-Pay Era"

♦♦♦

Investor Relations Magazine

December 5, 2008

"Even major investors wary of 'say on pay' legislation"

"Pros may not outweigh cons, forum participants say"

♦♦♦

New York Times

October 19, 2008

"We’ll Rescue You on Four Conditions"

♦♦♦

Agenda

July 7, 2008

"Divisions Grow Within Say-on-Pay Movement"

 

 

 

 

 

 

 

This Forum program is open, free of charge, to anyone concerned with investor interests relating to shareholder advisory voting on executive compensation, referred to by activists as "Say on Pay." As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

The organization of this Forum program was supported by Sibson Consulting to address issues relevant to broad public interests in marketplace practices, rather than investor decisions relating to only a single company. The Forum may therefore invite program support of several companies that can provide both expertise and examples of performance leadership relating to the issues being addressed.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to sop@shareholderforum.com.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.