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Cornish F. ("Con") Hitchcock, whose comments are presented below, is a member of the Forum’s Program Panel for reconsidering “Say on Pay” and had also been a member of a previous Forum program's Advisory Panel that had initiated the 2006 Advisory Voting project.  He is the principal of The Hitchcock Law firm in Washington, D.C., which has advised and represented fund managers as well as the Council of Institutional Investors concerning shareholder interests in executive compensation and other corporate governance issues.

For links to the referenced draft and other comments, see



Comments of

Cornish F. Hitchcock

August 4, 2008


To keep the dialogue going on this subject, and in anticipation of this Forum program’s meeting. . .


I think that Jeffrey Gordon’s paper and John Wilcox’s comments do an excellent job of framing the major issues in this area.  One thought that I took away from reading John’s comments is to view the advisory vote as a general vote of confidence or no confidence in the direction that the CD&A has charted, with the emphasis being on the overall linkage of pay to performance.  I take John’s point that devising a compensation plan is a board responsibility, not a shareholder responsibility.  That said, I think that you need to put on the table another facet of shareholder engagement on compensation issues, namely, the ability of shareholders to raise policy issues on specific compensation issues, as happens now on topics such as golden parachutes, SERPs, pension credits, etc.


I could easily argue for using this tool as a targeted means of raising concerns independently of (and as a supplement to) the broader strategic question raised in an up-or-down advisory vote on the entire CD&A.


A broader theoretical question, which deserves to be raised again in this discussion, is whether the market for executive compensation is functioning properly.  For example, does the market really demand paying executives a salary for ten years after their death, or paying for a “no-compete” clause after they’re dead – to take a few examples reported by the WSJ in June?  (I would term these “pay for no pulse.”)  Assuming one believes that these practices are not good governance or part of an effective and motivational compensation philosophy, what should a shareholder do?  Vote “no” on an advisory vote?  Submit a shareholder resolution on the topic?  Start a “vote no” campaign against Comp Committee members who are up for election this year?  Any or all of the above?  None of the above?


The obligatory disclaimer: These thoughts are my own and should not be attributed to any client.





Cornish F. Hitchcock

Hitchcock Law Firm

Washington, DC

(202) 489-4813




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