May 06, 2009
Shareowner Resolutions on Say on Pay Gain Widespread Support
by Robert Kropp
More than 100 resolutions targeting executive compensation have been filed in 2009, and ten out of
the 29 already voted on win majority support.
As public outrage over excessive executive compensation grows in the wake of the economic crisis,
investor networks have responded by introducing record numbers of so-called Say on Pay shareowner
resolutions in 2009. One network of over 70 institutional and individual investors, organized by
the AFSCME Employees Pension Plan and Walden Asset Management, has filed
resolutions at over 100 US corporations for the 2009 proxy season.
A total of 29
Say on Pay resolutions have been voted on thus far in 2009, and ten of those have received majority
votes. The 29 proposals have averaged more than 46% of votes in support. In 2008, 11 of 79
proposals received majority support, and overall the proposals gained 43% of voter support.
Of the companies where the resolutions have won majority support, Lexmark and Apple agreed to
adopt annual non-binding shareowner votes on executive compensation. At Apple, whose CEO, Steve
Jobs, joked that "I hope 'Say on Pay' will help me with my $1 a year salary," an original vote
count that included abstentions as no votes was corrected. 266 million votes, or 52% of votes cast,
approved the resolution on Say on Pay. The resolution at Apple had been introduced by the AFL-CIO Reserve Fund.
millions of dollars of stock options and a company jet as compensation for his executive position
at Apple. A 2008 SEC investigation into the backdating of stock options granted to Jobs resulted in
civil cases against two Apple executives. The scandal may have encouraged activist shareowners at
Apple to support the Say on Pay resolution.
At Lexmark, where for the second year in a row
more than 60% of shareowners voted in favor of a Say on Pay resolution introduced by Amalgamated Bank, the company agreed to
a non-binding shareowner vote on executive compensation beginning in 2010. The company had
originally opposed the resolution, contending that it would be placed at a disadvantage compared to
As part of the American Recovery and Reinvestment Act of 2009, all
institutions that receive or have received government assistance under the Troubled Asset Relief
Program (TARP) are required to permit their shareowners to vote on executive compensation.
Thus far in 2009, a total of 22 companies that had been targeted by Say on Pay resolutions have
agreed in advance of a proxy vote to give shareowners an advisory vote on executive pay.