Shareholder support for advisory votes on executive compensation is growing, albeit modestly, at U.S. corporations, according to a recently released report.
Median shareholder votes for “Say on Pay” rose to 42 percent in 2008 from 41 percent in 2007, according to The Corporate Library, an executive compensation research firm, which based its study on 76 proposals that have come in so far this year.
Say on Pay, nonetheless, lost support at eight financials institutions, Citigroup, Wachovia, Merrill Lynch and Wells Fargo.
Some of these banks, the study noted, had new CEOs and CEO compensation had decreased.
“It is possible that these facts have played a role in the decreased shareholder support for “say on pay” at these financial institutions,” said Damion Rallis, a research associate at The Corporate Library and author of the report.
But some big name companies have agreed to adopt Say on Pay.
Verizon Communications and Blockbuster Inc., among a handful of other companies, will give investors a nonbinding vote in executive pay early next year. The moves follow an unprecedented advisory vote in May by shareholders at insurance giant Aflac, the first for a U.S. company. Investors approved CEO Dan Amos’ $14.8 million compensation in 2007 after company shares reached record highs, according to the Associated Press.
The recent Say on Pay initiatives come as Congress considers legislation that would allow investors to weigh in on executive compensation. A bill that would do just that, proposed by Rep. Barney Frank, is awaiting a Senate vote after approval by the House of Representatives.
Increasing interest in executive compensation is driven by a need for greater accountability, some analysts say.
CEOs today make 400 times the salary of the average worker, compared with 40 times as much in 1980, according to the liberal research group The Institute for Policy Studies.