Schering-Plough tries ‘say on pay’ survey
Oct 29, 2008
short of a formal proxy vote
As the financial crisis fixes fresh focus on executive compensation,
Schering-Plough has announced a plan to mail a ‘say on pay’ questionnaire to
shareholders. The survey, which will go out with the company’s 2009 proxy
statement ahead of a late May annual meeting, stops short of the advisory
vote on compensation offered by a few US companies including Aflac and
Verizon, but may benefit investor relations.
‘This survey is evidence of our commitment to seek and consider shareholder
input, as we did in 2006 with the shareholder survey on majority voting for
directors,’ said Pat Russo, chair of Schering-Plough’s nominating and
corporate governance committee, in a notice detailing the plan.
Shareholders’ views on executive and director pay will inform future work of
the compensation committee and the board, and will be discussed in the
compensation, discussion and analysis (CD&A) section of the 2010 proxy
statement, the company says. Rich Koppes, a former general counsel at
CalPERS who is currently co-directing the executive education program at
Stanford Law School, will oversee the process and report survey results.
Paul Hodgson, senior research associate with The Corporate Library, calls
the move a good first step to gauge interest. ‘This is a very interesting
move, particularly the offer to include shareholder comments in the CD&A,’
he says. ‘It is true also that it is a good follow-on from their seeking
input on majority voting in 2006.’
In a comment posted to an internet shareholder and governance forum
moderated by investment banker Gary Lutin, Timothy Smith, senior vice
president of Walden Asset Management, said the move was ‘another act of
corporate governance leadership’ by Schering-Plough. Still, he said felt it
was time for all shareholders at Schering-Plough and beyond to have an
official vote on pay like they do on directors and auditors.
Schering-Plough posted an announcement about the survey in the corporate
governance section of its company website. In an e-mail message, Susan Wolf,
the company’s corporate secretary, vice president-corporate governance and
associate general counsel, said the news was also sent to shareholders who
have registered interest in the pay issue. She added that the decision to
solicit views is an initiative of the CEO and other board members, and was
not the product of negotiations with a shareholder.
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