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Program Reference, May 26, 2010 article

The Practical Corporate & Securities Law Blog

Broc Romanek and Dave Lynn are Editors of


May 26, 2010

Say-On-Pay So Far: Wow! A Third Company Fails to Gain Majority Support

As noted in the ISS Blog, KeyCorp became the third company to fail to obtain majority support for its executive pay package at its annual meeting last Friday. The pay package received only 45% support - it received 87% support last year. Here's the company's Form 8-K with the voting results.

So KeyCorp joins Motorola and Occidental Petroleum as the first three US companies whose management say-on-pay ballot items didn't pass. Wow.

Consider the magnitude of this development:

- These three companies are not Wall Street banks where the general public is angry over banker bonuses.

- There were no organized campaigns against the pay packages at these three companies. This was a pure grass roots movement. With organized campaigns, imagine the level of votes.

- Only a few hundred companies have say-on-pay on their ballot this year; a small fraction of the 10,000 that will have it on their ballot next year when Congress makes it mandatory.

- If the Senate provision remains in the final bill changing NYSE Rule 452, say-on-pay will become a "nonroutine" agenda item - and broker nonvotes won't be available to be cast in favor of pay packages. This means it will become harder to obtain majority support for executive pay packages.


- Broc Romanek

Posted by broc at 7:44 AM




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