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For the SEC filing of the Waddell & Reed letter referenced in the article below, see:

For a subsequent report of results, see


RiskMetrics (f/k/a Institutional Shareholder Services - "ISS") Insight Governance, April 6, 2010 article



A Fight Over "Say on Pay"

At Waddell & Reed Financial's annual meeting on Wednesday, investors will consider a shareholder proposal that seeks an annual advisory vote on executive compensation.

The Kansas-based investment services company has taken the unusual step of including a special solicitation with its proxy statement to oppose the proposal. The resolution is sponsored by Boston Common Asset Management, the California State Teachers' Retirement System, and Calvert Asset Management. In a March 5 letter to shareholders, CEO Henry Herrmann warned that adoption of this reform would put the company "at a serious competitive disadvantage and could erode the value of your investment."

While more than 60 U.S. issuers, including JPMorgan Chase, Wells Fargo, and Goldman Sachs, have agreed to hold voluntary pay votes, Waddell & Reed argued that advisory votes would lead to a "loss of executive talent" and would not result in "meaningful dialogue with shareholders."

Last year, the company initially reported that a "say on pay" proposal received majority support; the company later petitioned a Delaware judge for permission to count additional votes, which pushed the support level below 50 percent. Pay vote proponents have been surprised by the company's efforts to oppose this resolution.

"Waddell & Reed is one of the outliers in its aggressive campaign against this important reform, and that concerns us as shareowners," said Dawn Wolfe, associate director of ESG Research at Boston Common.




This Forum program is open, free of charge, to anyone concerned with investor interests relating to shareholder advisory voting on executive compensation, referred to by activists as "Say on Pay." As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

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