January 26, 2009
HP Is Latest Corporation to Accept Shareowner Votes on Executive Compensation
by Robert Kropp
As pressure on companies to adopt say-on-pay resolutions increases, investors count on
Congressional support for mandatory Advisory Votes.
In a press
release dated January 16, HP, whose chief executive Mark Hurd received about $42.5 million in
pay during 2008 while 24,600 jobs at the computer company were eliminated, announced that its board
of directors will allow HP shareowners to decide whether the company should conduct an annual
nonbinding advisory vote relating to executive compensation.
HP was the latest in a
growing number of corporations agreeing to the terms of a effort led by the Interfaith Center on Corporate Responsibility (ICCR) to request a
management-sponsored non-binding advisory vote on executive compensation at over 100 U.S.
The investor network was organized by the American Federation of State, County and Municipal Employees (AFSCME)
Employees Pension Plan and Walden
Asset Management. Timothy Smith, Senior Vice President at Walden Asset Management, said,
"Having an advisory vote establishes a solid foundation for a useful dialogue with shareowners. We
expect more companies to step forward this winter and declare their support such as Hewlett-Packard
Companies that will implement the advisory vote in the 2009 proxy season include
Verizon, Aflac, Blockbuster, Motorola, MBIA and Ingersoll Rand. Other companies have informed
shareowner advocates that they are putting a management-sponsored Advisory Vote on their proxy in
2009 and 2010.
The companies targeted in the shareowner proposal include Apple, Bank of
New York Mellon, American Express, Coca-Cola, AIG, Capital One, Hewlett-Packard, Intel, Wells
Fargo, AT&T, Exxon Mobil, Raytheon, General Electric, Goldman Sachs, Home Depot, IBM, Merck,
UnitedHealth, Time Warner, Citigroup, ConocoPhillips, CVS Caremark, Morgan Stanley, Valero Energy,
YUM! Brands, Occidental Petroleum, Wal-Mart, Rite-Aid, KB Homes, Ryland Group and Charming Shoppes.
A bill to require an advisory vote has been passed in the US House of Representatives, and
if the Senate passes the bill it would become a legal requirement.