TheCorporateCounsel.net

April 13, 2007

First “Say on Pay” Shareholder Proposals Considered at Annual Meetings

As this Washington Post article notes, the first “say on pay” shareholder proposals were voted on this week: 47.3% of shareholders supported the proposal at the Bank of New York and 37% at Morgan Stanley. These are very high numbers for a first-time-like type of proposal.

This ISS article lists upcoming annual meeting dates for other major companies that will include “say on pay” on their ballots. Overall, over 60 companies will have shareholders vote on this issue sometime this year. Last year, there were 7 of these proposals, averaging a 40% level of support.

The ISS article also recaps the recent ISS webcast about how “say on pay” has worked in other countries that have tried it. You can still listen to the audio archive or access a transcript of that webcast via a free registration.

Internal Pay Equity: Pay “Cap” is a Misnomer

On this recent CNBC “On the Money” segment, I thought Professor Charles Elson does a pretty good job of explaining the difference between internal pay equity and pay “caps.” Remember that internal pay equity is just an alternative benchmark to using traditional peer group surveys. Internal pay equity is no more of a “cap” than those ubiquitous peer group surveys are…

Internal Pay Equity: In Practice

I’ve been reviewing recently filed proxy statements and happy to note that several hundred mention that boards have considered internal pay equity when setting CEO pay levels. However, very few of these companies provide any details about (or if) they really use this methodology as an alternative benchmarking tool.

We are in the process of setting the agenda for our “4th Annual Executive Compensation Conference,” which is being reconfigured this year to ensure we provide as much practical guidance as possible. We are planning to include a panel on internal pay equity that includes a number of panelists from companies that have used internal pay equity so they can explain how they do implement it. If you are from one of those companies, can you please drop me a line, even if you are unwilling to speak? My email address is broc.romanek@thecorporatecounsel.net. Thanks!