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Associated Press (as published by Forbes), July 18, 2007 article


Associated Press

Pay Proposal Advocates Get New Allies
By ELLEN SIMON 07.18.07, 4:46 PM ET

NEW YORK - Investors advocating for a greater shareholder voice on executive compensation are getting a few new allies and a lot more willing listeners.

Mutual fund company AIM Investments quietly changed its proxy voting guidelines earlier this year. The company, which had $149 billion in assets under management as of the end of March, has been criticized by advocates in the past as lax on executive pay.

But its new guidelines now say it will support shareholder proposals that give investors an advisory vote on executive pay. The proposals, known as "say on pay" proposals, were one of the hottest issues during the recently ended proxy season.

And EMC Corp., a data storage company based in Hopkington, Mass., has joined a working group on executive pay that is hosting a conference Thursday at Pfizer Inc. on say on pay proposals.

The companies in the group, which include Pfizer, Intel Corp., Bristol-Myers Squibb Co., Schering-Plough Corp., American International Group Inc., JPMorgan Chase & Co. and Colgate-Palmolive have been meeting this year with the American Federation of State, County and Municipal Employees and Walden Asset Management to discuss shareholder approval of pay packages.

The group expects about 150 company representatives, investors, lawyers and experts to attend Thursday's conference.

Say-on-pay proposals passed at only a handful of companies, including Blockbuster Inc., Verizon Communications Inc. and Motorola Inc. this proxy season. But corporate governance expert Stephen Davis, of Davis Global Advisors Inc. in Madison, Conn., said the average votes in their favor - 40 percent at seven companies where AFSME made say-on-pay proposals - was "an unheard-of high for an idea in its first innings."

In January, financial institutions with an aggregate of $1.5 trillion under management wrote the Securities and Exchange Commission advocating a say on pay vote. The same group sent a letter Friday to Sen. Christopher Dodd, chairman of the Senate Banking Committee, asking for his "renewed attention" to the matter.

A say-on-pay proposal passed the House in April and is now before the Senate Banking Committee.

Daniel Summerfield, senior adviser for responsible investment at the Universities Superannuation Scheme, the United Kingdom pension fund for college professors, said, "The only people conspicuous by their silence at the moment are the SEC (Securities and Exchange Commission) and other regulatory parties."


Copyright 2007 Associated Press. All rights reserved.



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