Activism
Pressure for US vote on executive pay
During 2006
F&C Investments cast more votes against
management on matters related to remuneration than on any other issue,
particularly in the US.
Karina Litvack, F&C head of
governance, said there are serious concerns about remuneration policies in the
US, where shareholder dialogue on executive pay is not an established practice.
In the absence of companies
specifically inviting investor approval of pay packages, F&C signalled its
disapproval by voting against compensation committee chairmen or members at over
50 firms, including
Exxon Mobil,
Home Depot and
Pfizer.
Meanwhile,
Aflac has become the first
major US company to give shareholders a non-binding vote on executive pay.
Dan Amos, the insurer’s chairman and
chief executive, said as owners of the company, shareholders have a right to
know how executive compensation works and to provide feedback to management.
Shareholders will be given their first chance to vote on pay in 2009.
Aflac’s decision suggests US boards are
beginning to realise it is in their own interests to involve investors in
decisions on pay, suggested the editorial in the
Financial Times (20 February). An advisory vote, said the FT, is one way of legitimising
compensation agreements: if a company cannot convince its own shareholders, they
have little chance of winning over public opinion.
Links
F&C Investments
Exxon Mobil
Home Depot
Pfizer
Aflac
Financial
Times
March 2007 |
