Has 'Say on Pay' Reached a
Seven more large-cap firms have agreed to hold advisory votes on executive
compensation, according to “say on pay” proponents.
companies include Capital One, which included a management-sponsored
vote in its preliminary proxy statement for its April 29 annual
meeting. Morgan Stanley has reached a tentative agreement with
proponents to conduct a pay vote this year, according to Calvert Asset
Management, while U.S. Bancorp has told Walden Asset Management that it
will hold a 2010 advisory vote. All three firms held mandatory pay votes
last year when they were participants in the U.S. government’s Troubled
Asset Relief Program (TARP), and received more than 90 percent support
for their pay practices.
Fifth Third Bancorp has agreed to continue holding advisory votes after
it exits the TARP program, proponents said. Another recent adopter is
consumer products firm Colgate-Palmolive, which
announced it would hold its
first advisory vote on May 7 and then every two years. In addition, Sun
Trust Banks and Honeywell International have recently reached agreements
to hold advisory votes, proponents said.
Overall, at least 56 U.S.-based companies have held voluntary “say on
pay” votes or have agreed to do so, according to data collected by
RiskMetrics Group’s ISS Governance Services unit.
“It’s been a natural
evolutionary process for companies to embrace a relatively new idea like
‘say on pay.’ But now we are reaching the tipping point,” Timothy Smith,
senior vice president at Walden, said in a
press release this week. “Less
than a year ago, only a handful of companies had adopted the vote. Now
more than 50 companies have agreed to do so, with more stating a higher
comfort level with the concept.”