GRETCHEN MORGENSON: Roadblocks to Greater Say on Pay

[Veronica.Franco]

Saturday, January 20, 2007
Roadblocks to Greater Say on Pay

By GRETCHEN MORGENSON
GREATER detail on executive pay will arrive this spring, thanks to new regulatory requirements. But shareholders won’t have a greater say on how that pay is computed if companies like AT&T and Verizon Communications get their way.

Shareholders of both companies have submitted proposals requiring an advisory vote by the owners on corporate pay practices, but AT&T and Verizon are doing their best to stymie the initiatives. Proposals like these were popular last year and promise to be even more so in 2007. A shareholder activist estimates that as many as 75 companies will receive such initiatives this year.

In 2006, the American Federation of State, County and Municipal Employees’ pension unit put forward advisory initiatives at seven companies and garnered support from 41 percent of the votes cast, on average. At Merrill Lynch’s annual meeting, for example, 35.5 percent of the votes cast favored the proposal.

It is not yet clear what companies besides AT&T and Verizon have received the initiatives this year. Under the terms of the proposals, the shareholder votes would be nonbinding. Given the support that company owners gave these initiatives last year, it is surprising that companies like AT&T and Verizon are fighting hard to keep them off corporate proxies in 2007. After all, these are the owners talking. And let’s not forget that these proposals seek something that regulators already require of public companies in Britain and Australia.

http://wealthyfrenchman.blogspot.com/2007/01/roadblocks-to-greater-say-on-pay.html