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Investors Appeal to 17 Financial Firms to Adopt Advisory Vote on Executive Compensation
Investors Appeal to 17 Financial Firms to Adopt Advisory Vote on Executive Compensation
Published 01-28-10
Submitted by Walden Asset Management
Approximately 30 investors, deeply involved in the issue of Say on Pay, have sent letters to 17 financial institutions urging them to implement an annual Advisory Vote on executive pay starting with the upcoming 2010 proxy season.
This appeal comes in the midst of a heated debate over Wall Street bonuses and follows recent decisions by Goldman Sachs, State Street Corporation and Bank of New York Mellon to implement the Advisory Vote in their 2010 proxies.
To date, over 40 companies have agreed to voluntarily implement Say on Pay and hundreds of other companies, having received TARP funds, are required to include the Advisory Vote in their proxies.
This is a particularly relevant request to financial companies, most of which were required to implement Say on Pay last year as TARP recipients. But upon repaying the TARP funds, most banks have reverted to their past position of refusing to hold an Advisory Vote.
Shareholder resolutions on Say on Pay have been a high priority for investors. In 2009 close to 100 companies received such shareholder resolutions. Over 70 proposals came to vote and averaged more than 46% support with 24 majority votes, indicating significant investor support for this reform.
In addition, the House of Representatives passed a bill requiring advisory vote and a bill is pending in the Senate.
The letter states "Adopting Say on Pay is not only an idea whose time has come, it is a reasonable and modest step."
Many of the banks receiving the letter have also received shareholder resolutions on various executive compensation reforms including Say on Pay.
The accompanying link includes a model letter with signatories and the 17 financial firms listed.
http://www.waldenassetmgmt.com/social/action/library/Letter_SOP_2010.pdf
Among the letter signatories, are major pension funds such as CalSTRS, CalPERS, TIAA-CREF, State of Connecticut, AFSCME, the United Methodist Church General Board of Pension & Health Benefits, the Council of Institutional Investors and a cross-section of religious investors, trade unions and socially responsible investment firms such as Walden Asset Management.
Among the 17 companies receiving the letter are JPMorgan Chase, Morgan Stanley, Citigroup, Wells Fargo, Bank of America and American Express.
Walden Asset Management, the State of Connecticut Treasurer's Office and AFSCME coordinated the letter.
