February 24, 2020

CSRWire.com The Corporate Social Responsibility Newswire

news by category

CSR News

The Latest Corporate Social Responsibility News: This Proxy Season, Shareowners Getting a "Say"

Submitted by: CSRwire

Categories: Events, Corporate Social Responsibility

Posted: May 20, 2009 – 12:00 AM EST


May 20 /CSRwire/ - By CSRwire Contributing Writer Bill Baue of Sea Change Media

Each spring, a limited form of democracy blooms at corporate annual general meetings when investors vote their proxy ballots on shareowner resolutions and other business. This proxy season, early tallies from one shareowner campaign suggest that investors are gaining more of a say on corporate governance. "Say on Pay" resolutions, which seek an advisory vote on executive compensation packages, have received a dozen majority votes this season, according to RiskMetrics -- most recently a 61.5 percent vote at Prudential Financial. And RiskMetrics says more than a dozen companies have agreed to annual say on pay votes, dating back to Aflac's groundbreaking March 2008 agreement with Boston Common Asset Management's request for an advisory vote on pay.

The Say on Pay movement got a big boost in February when the Treasury Department required say on pay votes at all banks receiving Troubled Asset Relief Program (TARP) funding. Influential business columnists Gretchen Morgenson and Joanne Lublin gave another boost this week with positive articles on say on pay in theNew York Times and Wall Street Journal (respectively.) However, some also point out the inherent limitations of the say on pay model for "providing no feedback on what shareholders dislike about current pay plans," according to Boardroom Insider editor Ralph Ward. "By 2010, look for angry investors to notice that their 'Say on Pay' really said nothing."

Ward voices a long-standing critique of the advisory nature of shareowner resolutions. Shareowner activists recognize that this seeming limitation has hidden strengths, as companies must embrace the change requested by shareowners. Sometimes, this change happens incredibly quickly, sometimes it can take years, and sometimes it doesn’t happen if there’s not enough sustained shareowner support.

For example, Internet service provider Knology agreed to revise its Internet privacy policy in response to a first-year shareowner resolution seeking Internet privacy and freedom of expression. So the New York City Pension Funds, as members of the Open Media and Information Companies Initiative, or OpenMIC coalition, withdrew the resolution. This same resolution received 30.5 percent support at CenturyTel, an extremely high vote for a first-year resolution (which needs only 3 percent support to qualify for re-filing.) "When almost one out of three shareholders expresses this kind of concern, it's time for the Board to re-examine how it will attend to the policy challenges, and opportunities, it faces,” said Jonas Kron, senior social research analyst at Trillium Asset Management, which filed the resolution at CenturyTel.

Trillium also mustered 30.5 percent support for a shareowner resolution asking ConocoPhillips to report on the environmental impacts of expanding Canadian oil sands exploitation -- three percent more than the 27.5 percent it received last year in its initial filing. Trillium and co-sponsor Green Century Capital Management will continue filing the resolution -- and engaging with management -- until the company responds.

Bill Baue's commentary is but one integral part of our Weekly News Alert service. If you are interesting in subscribing to this service please click here.

CSRwire can now be found on Linkedin, Facebook, and now Twitter.

About CSRwire's Weekly News Alert

CSRwire's free weekly News Alert is a summary of the latest and most important CSR news from the week, put into context with local and global news. The Alert highlights noteworthy initiatives and informs the CSR and Social Responsible Investing communities including professionals, analysts, academics activists, and consumers.

For more information, please contact:

Phone: 802.251.0110

For more from this organization:



Issuers of news releases and not csrwire are solely responsible for the accuracy of the content