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Mercury News, November 5, 2008 article



Sun shareholders approve 'say on pay' measure


Sun Microsystems shareholders approved an advisory "say on pay" resolution at their annual meeting Wednesday, joining a small but growing national movement for increased corporate accountability to investors.

After rejecting two similar proposals in recent years, about 67 percent of Sun shareholders agreed this time to ask the company's board to let shareholders have an annual advisory vote on the compensation awarded to top executives. About 32 percent of voting shareholders opposed the measure.

The result was a defeat of sorts for Sun's board, which had recommended a no vote on grounds that the company already considers other forms of feedback from investors. It came at a meeting where several stockholders also complained about the sharp decline in Sun's share price over the last year.

Sun has struggled in the economic downturn, posting a $1.67 billion loss in its last quarter after taking a significant write-down on the value of past acquisitions. Chief Executive Jonathan Schwartz acknowledged the company is in a "tough" economic environment but told shareholders that Sun is positioned for long-term growth.

Proponents of the "say on pay" measure said it was not meant as a specific commentary on Sun's current pay structure, although they criticized the board in a written statement for compensating Schwartz for personal aircraft use and installing a home security system. Sun reported that Schwartz received more than $7.7 million in total compensation for its last fiscal year, but said he received only about half of his potential bonus because of Sun's poor performance in the second half of the year.

Apple shareholders approved a similar measure in March, while Oracle investors rejected another proposal last month. Sun's resolution was proposed by Connecticut state Treasurer Denise Nappier, who has introduced similar measures at other companies in which she has invested on behalf of her state employees' retirement plan.

Contact Brandon Bailey at or (408) 920-5022.







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