New Report Shows Decreased Shareholder Support for Executive Compensation

The Wall Street Journal (June 26) cites the latest edition of ProxyPulse, a joint publication of Broadridge Financial Solutions Inc. and PwC's Center for Board Governance, in reporting that shareholder support for executive compensation plans has declined this year at mid-cap, small-cap, and micro-cap companies. According to the newspaper, ProxyPulse analyzed 2,788 shareholder meetings held between Jan. 1 and May 22 and determined that "say-on-pay proposals failed to receive majority support at 72 companies compared to 54 companies in 2013." Mary Ann Cloyd, head of PwC's Center for Board Governance, remarks, "This trend points to the significant pressures boards still face around executive compensation." The report further shows that average support levels for executive pay plans climbed from 89 percent to 91 percent at large-cap companies.


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More Midsize Companies Failing Say-on-Pay Votes

"Shareholders casting executive compensation 'say-on-pay' votes suddenly got tougher on midsize companies this year," reports the Wall Street Journal (June 26, Chasan). Around 5 percent of midsize companies with market values between $2 billion and $10 billion have failed to obtain majority support at annual meetings this year. That is more than twice the 2 percent in the previous proxy season, a review of nearly 2,800 annual meetings by Broadridge Financial Solutions Inc. and PricewaterhouseCoopers shows. "After paying close attention to the say-on-pay votes at the biggest firms over the past few years, shareholders may be 'increasing the spotlight' on the smaller firms in their portfolios," reasons Chuck Callan, senior vice president of regulatory affairs at Broadridge, which processes proxy votes for thousands of firms each year. Even though say-on-pay votes are non-binding, companies are required to conduct them regularly under the 2010 Dodd-Frank Act. Failures are often considered a black mark by corporate directors.

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CEO Behind Hilfiger Overpaid by $8 Million, Crystal Says

Shareholders of PVH Corp. (PVH), owner of the Tommy Hilfiger and Calvin Klein apparel brands, voted today in favor of Chief Executive Officer Emanuel Chirico’s compensation plan. Pay expert Graef Crystal says he’s overpaid.

About 97 percent of votes cast at New York-based PVH’s annual meeting approved the company’s executive pay plan for last year, spokeswoman Dana Perlman said in an e-mail. Chirico received $18.4 million in the year ended Feb. 2, about 70 percent more than what Crystal calculates as his going rate, or the pay he should receive based on his company’s size, total return versus the Standard & Poor’s 500 Index (SPX) in its fiscal year and his tenure as chief executive. - Laura Marcinek, Bloomberg

To contact the reporter on this story: Laura Marcinek in New York at lmarcinek3@bloomberg.net

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Great Men, great pay? Why CEO compensation is sky high.

According to data released this month by executive-salary tracker Equilar, the 200 most highly compensated U.S.-based CEOs in 2013 received an average pay package of $20.7 million — including salary, cash bonuses, stock-based awards and other benefits. Each of those 200 executives took home more than $10 million in total compensation. At the top of the chart, Cheniere Energy’s Charif Souki pocketed $142 million, Mario Gabelli of GAMCO Investors was awarded $85 million and Oracle’s Larry Ellison took home $78 million. In the 1950s, the ratio between chief executive remuneration and that of a typical worker in the company was about 20 to 1. Today, the ratio between the pay of Fortune 500 chief executives and that of the average employee in these organizations exceeds 200 to 1. - Nancy F. Koehn, The Washington Post


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REITs Cede Ground on Executive Pay

"Executive compensation at real-estate investment trusts continued to rise last year, but at the slowest pace in five years as companies focused on making pay packages more shareholder-friendly. Overall compensation rose 2.2% last year, down from a gain of 6% in 2012, according to FPL Associates LP, a real-estate focused compensation consultancy based in Chicago. The gain last year was the weakest since 2008, when total compensation fell 16% during the real-estate bust." ROBBIE WHELAN, Wall street journal

Write to Robbie Whelan at robbie.whelan@wsj.com

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Using Dodd-Frank to Curb Executive Excess

"Proxy season is the magical time of year when shareholders cast their votes on corporate governance. Since 2011, the ‘Say on Pay’ provision of Dodd-Frank ensured those votes would include an up-or-down non-binding voice in executive compensation packages. If that sounds toothless, well, hardly anyone is even getting gummed. According to Equilar’s say on pay tracker, most companies’ executive compensation plans passed with 90-plus percentage majorities. Consulting firm Semler Brossy reports that just 36 companies—2.1 percent of their tally—have failed their votes so far this year. " - Posted by Catherine Ruetschlin on June 6, 2014, Demos

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