With dissatisfaction with CEO performance at big-name companies apparently on the upswing, executive pay was bound to gain investor interest this year.
While voting rights tops the priority list for shareholder proposals this proxy season, executive pay is also likely to be the focus of a push by institutional investors, according to Institutional Shareholder Services.
Indeed, ISS has tracked 104 pending proposals aimed at giving shareholders more power in voting for directors, and ninety-four out of more than 150 such proposals made it to a vote last year. Besides heightened interest from investors, more attention from the Securities and Exchange Commission is likely to boost the momentum for majority voting in board elections will likely continue for 2007, according to ISS.
Indeed, while majority voting is not standard practice at public companies, many have moved away from the plurality model for board elections that long held sway. Under the plurality system, a director can be voted in even if only a few shareholders give the director approval, since voters do not have the choice to vote "against" a candidate. With majority voting, however, shareholders do have that choice, and, to be elected, each nominee must get more votes in favor of his or her election rather than against it.
See full Article.
Posts
