Corporate Governance

Council of Institutional Investors Weighs in on "Say-on-Pay"

By Jim Hodgson

As we reported in late-October, the SEC released proposed rules designed to implement the executive compensation provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The rules will empower shareholders to cast advisory votes on executive compensation and ?golden parachute? payments for departing executives in change-of-control situations.

The Council of Institutional Investors recently issued guidelines to assist shareholders who cast advisory votes against proposed compensation arrangements.  In its recent publication, Wall Street Pay: Size, Structure and Significance for Shareowners, CII recommends that shareholders go beyond the ballot box by writing letters to company executives explaining their positions and then arranging for in-person meetings in which to advance their agendas.  And, "[i]f change is not forthcoming, owners can let the company know that they will vote against the reelection of compensation committee members."  As a last step," the Council advises, "consider filing a shareholder resolution seeking improvements in specific pay practices."  Follow this link for access to the full report and more of the Council?s advice along these lines.

Full post as published by PomTalk on December 02, 2010 (boomark / email).