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The investor group letter referenced in the article and commentary below can be downloaded from the following link:

For additional information about the group of U.S. funds submitting shareholder proposals, also reported below, see

For additional views of of Keith L. Johnson, referenced below as adviser to the investor group in its drafting of the SEC letter and currently coordinating the International Roundtable on Executive Remuneration, see



Financial Times, January 26, 2007 article and commentary



Push to curb executive pay

By Francesco Guerrera in New York and Kate Burgess in London

Published: January 26 2007 02:00 | Last updated: January 26 2007 02:00


Leading global investors yesterday launched an unprecedented campaign to curb outsized executive pay, urging regulators and companies to give shareholders the right to vote on compensation.

The campaign brings together fund managers such as ABP, Europe's biggest pension fund, with US pension funds including the New York City Employees' Retirement System.

A dozen international shareholder groups, managing more than $1,500bn in assets, have written to US regulators, politicians and stock exchanges pressing for a UK-style non-binding shareholder vote on executive compensation packages.

The letter, sent yesterday, coincided with a similar one sent by the Association of British Insurers, representing a fifth of UK investors, and a move by US pension funds and religious groups to file motions asking for a vote on pay at 44 companies, including ExxonMobil, GE and Citigroup.

The actions underline the fact that executive pay and shareholder scrutiny of management will be the key battlegrounds in this year's "proxy season", the annual round of companies' shareholder meetings.

"Institutional investors are fed up with the unbridled excesses of executive compensation in the US," said William Thompson, New York City comptroller, who manages the city's $93bn-plus pension fund. "It is time for American companies to adopt this important policy for improving transparency and disclosure, and board accountability for executive pay."

Shareholder anger at excessive executive compensation has been rising amid evidence that many US chief executives receive big pay packages regardless of their companies' performance.

Bob Nardelli resigned as chairman and chief executive of the retailer Home Depot this month with a $210m severance package despite a slump in the share price in his six-year tenure.

Many companies and business groups oppose giving shareholders a greater say on matters such as executive pay, arguing that it could encourage activist hedge funds and other investors with short-term horizons to hold companies to ransom.

In the letter to Christopher Cox, chairman of the Securities and Exchanges Commission, the international investors said a non-binding vote on pay would encourage pay-for-performance practices that would align the interests of executives more closely with shareholders.

Signatories welcomed the SEC's recent moves to enhance disclosure on pay but fear that new rules could, on their own, lead to greater increases in pay by enabling chief executives to see how much money their peers are receiving.

UK shareholders have been able to cast advisory, non-binding votes on remuneration reports since the end of 2002 as part of wider moves to improve corporate governance and avoid the kind of corporate scandals - such as Enron - that have dogged US companies.




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