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Why isn't there more focus on shareholders' say on executive pay?
TCF loses vote on executive pay
Article by: ADAM BELZ
Shareholders of TCF Financial Corp. have repudiated the bank’s pay for its executives, according to a filing with the Securities and Exchange Commission.
In a nonbinding vote, 54 percent of the company’s shareholders opposed its pay packages for top executives, including $4.8 million in total 2013 pay for William Cooper, the Wayzata-based company’s chief executive and chairman.
“We respect the vote of our shareholders on this matter,” TCF Financial said in a statement. “Based on the outcome of the nonbinding vote, we intend to meet with many of them and will then move forward with addressing any concerns regarding TCF’s incentive compensation model.”
The chance to say “yea” or “nay” to executive pay was given to shareholders by the Dodd-Frank Act in 2009. The vote is nonbinding, but corporate directors have become wary of the warning shot that can be fired when too many investors vote “no” to their pay packages.
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http://www.startribune.com/business/256774891.html
Article by: ADAM BELZ
Shareholders of TCF Financial Corp. have repudiated the bank’s pay for its executives, according to a filing with the Securities and Exchange Commission.
In a nonbinding vote, 54 percent of the company’s shareholders opposed its pay packages for top executives, including $4.8 million in total 2013 pay for William Cooper, the Wayzata-based company’s chief executive and chairman.
“We respect the vote of our shareholders on this matter,” TCF Financial said in a statement. “Based on the outcome of the nonbinding vote, we intend to meet with many of them and will then move forward with addressing any concerns regarding TCF’s incentive compensation model.”
The chance to say “yea” or “nay” to executive pay was given to shareholders by the Dodd-Frank Act in 2009. The vote is nonbinding, but corporate directors have become wary of the warning shot that can be fired when too many investors vote “no” to their pay packages.
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http://www.startribune.com/business/256774891.html
This is a small financial institution, but it's amazing that these shareholder votes don't get more press coverage. At the very least, more focus would serve to isolate the greed of top executives.
CEO pay at top companies now 331 times that of average worker, 774 times that of minimum-wage worker
http://www.dailykos.com/story/2014/04/16/1292207/-CEO-pay-at-top-companies-now-331-times-that-of-average-worker-774-times-that-of-minimum-wage-worker
Look at the jump from 1983 to 1993.
Teamsters Applaud SEC's Navistar Decision Upholding Dodd-Frank
http://teamster.org/content/teamsters-applaud-secs-navistar-decision-upholding-dodd-frank
Robert Reich: The Significance of Citigroup’s Shareholder Revolt
http://www.democraticunderground.com/1002579118
Shareholder votes on executive compensation at US firms have been judicious as well as effective, new research finds
Findings bode well for mandatory say-on-pay provisions of financial reform bill
July 21 - When Robert I. Toll stepped down as CEO of luxury-home builder Toll Brothers last month, he could look back over a career replete not only with riches but with his industry's most coveted awards for excellence. But that didn't save him from a 73% pay cut three years ago, from $26 million to $7 million, after owners of one fourth of Toll Brothers' shares withheld their votes to re-elect the head of the firm's compensation committee. At the time, a proxy advisory firm concluded that Mr. Toll's average compensation over the previous three years had been 564% above the median paid to CEOs at peer companies...shareholder "vote-no" campaigns similar to the one at Toll Brothers have turned out to be a highly effective way of bringing stratospheric CEO paychecks closer to earth, according to new research. A study to be presented at the annual meeting of the American Accounting Association (San Francisco, Aug 1-4) finds that such campaigns resulted on average in a single-year CEO pay drop of about $7.3 million (about 38%) in firms where pay was excessive . Companies that sustained hefty CEO pay reductions during the study's time span (1997-2007) included Yahoo, UnitedHealth, United Natural Foods, Sanmina-Sci, Saks Inc, Sprint, Qwest Communications, Legg Mason, Lennar, KB Home, Constellation Energy, and Apple.
In addition, the study finds that pay-design proposals by institutional investors resulted in average pay reductions of about $2.3 million in companies with excessive CEO pay. Excessive pay is an amount greater than what would be expected on the basis of a number of standard economic determinants, including firm size, return on assets, stock performance, and industry.
The findings would seem to bode well for the increase in shareholder say on pay likely to result from the major financial-reform bill that President Obama signs into law today. The new legislation requires shareholder advisory votes on executive pay at least once every three years (and, subject to the decision of the shareholders, possibly as often as every year) in all companies or categories of companies not specifically exempted by the SEC.
"This study casts doubt on the two most frequent criticisms of increased shareholder say on pay -- either that it will be largely ineffective or that it will lead to radical changes dictated by unions or other special-interest groups," comments Fabrizio Ferri of New York University, who carried out the new research with Yonca Ertimur of Duke University and Volkan Muslu of the University of Texas at Dallas.
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http://aaahq.org/newsroom/shareholdervotes.htm
Findings bode well for mandatory say-on-pay provisions of financial reform bill
July 21 - When Robert I. Toll stepped down as CEO of luxury-home builder Toll Brothers last month, he could look back over a career replete not only with riches but with his industry's most coveted awards for excellence. But that didn't save him from a 73% pay cut three years ago, from $26 million to $7 million, after owners of one fourth of Toll Brothers' shares withheld their votes to re-elect the head of the firm's compensation committee. At the time, a proxy advisory firm concluded that Mr. Toll's average compensation over the previous three years had been 564% above the median paid to CEOs at peer companies...shareholder "vote-no" campaigns similar to the one at Toll Brothers have turned out to be a highly effective way of bringing stratospheric CEO paychecks closer to earth, according to new research. A study to be presented at the annual meeting of the American Accounting Association (San Francisco, Aug 1-4) finds that such campaigns resulted on average in a single-year CEO pay drop of about $7.3 million (about 38%) in firms where pay was excessive . Companies that sustained hefty CEO pay reductions during the study's time span (1997-2007) included Yahoo, UnitedHealth, United Natural Foods, Sanmina-Sci, Saks Inc, Sprint, Qwest Communications, Legg Mason, Lennar, KB Home, Constellation Energy, and Apple.
In addition, the study finds that pay-design proposals by institutional investors resulted in average pay reductions of about $2.3 million in companies with excessive CEO pay. Excessive pay is an amount greater than what would be expected on the basis of a number of standard economic determinants, including firm size, return on assets, stock performance, and industry.
The findings would seem to bode well for the increase in shareholder say on pay likely to result from the major financial-reform bill that President Obama signs into law today. The new legislation requires shareholder advisory votes on executive pay at least once every three years (and, subject to the decision of the shareholders, possibly as often as every year) in all companies or categories of companies not specifically exempted by the SEC.
"This study casts doubt on the two most frequent criticisms of increased shareholder say on pay -- either that it will be largely ineffective or that it will lead to radical changes dictated by unions or other special-interest groups," comments Fabrizio Ferri of New York University, who carried out the new research with Yonca Ertimur of Duke University and Volkan Muslu of the University of Texas at Dallas.
- more -
http://aaahq.org/newsroom/shareholdervotes.htm
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