BOSTON, Jan. 31, 2011 /PRNewswire/ -- Today 39 institutional investors, representing more than $830 billion in assets, issued a public call for companies to support annual advisory votes on executive compensation in their 2011 proxy statements and for investors to vote for annual "Say on Pay" votes.
The Dodd-Frank Wall Street Reform and Consumer Protection Act calls for mandatory Say on Pay votes at all 2011 annual meetings. Shareowners will also vote to determine whether the vote should occur every one, two or three years.
The investor statement argues an annual frequency vote for Say on Pay provides maximum accountability, is the standard in all other major markets and encourages companies to communicate effectively with shareowners.
"Unchecked and unapproved CEO pay directly contributed to the financial crisis," said Gerald W. McEntee, President of AFSCME, which was the first sponsor of a shareholder resolution promoting an advisory vote on pay. "Companies with problematic pay practices or a history of ignoring shareholders will be seeking fewer votes. That's why shareowners need to vote for annual say on executive pay."
Timothy Smith, Senior Vice President of Walden Asset Management stated, "This will be a unique proxy season on executive compensation. Addressing excesses and problems with executive compensation requires a vote each and every year rather than occasional accountability every three years. Say on Pay votes have already stimulated re-thinking by Board Compensation Committees on various perks and controversial pay formulas. The discipline of an annual vote will encourage Boards to be more responsive and accountable on compensation."
Large institutional investors including CalPERS, the New York State Common Retirement Fund, NYCERS, F&C Asset Management (U.K.), Hermes (U.K.), the General Board of Pension and Health Benefits of the United Methodist Church, Calvert Asset Management, Pax World and Amalgamated Bank have signed the statement.
Influential proxy advisor Institutional Shareholder Services will recommend shareholders vote for the annual advisory votes, noting annual votes "provide the most consistent and clear communication channel for shareholder concerns about companies' executive pay programs."
Major mutual funds, which have announced they will support the annual frequency and or whose proxy voting guidelines support an annual standard, include Vanguard, State Street, Fidelity and Putnam.
The full public statement release and signers can be found at http://www.waldenassetmgmt.com/social/action/SOP_1-31-2011.pdf.
About Walden Asset Management: Walden has been a leader in integrating environmental, social and governance analysis into investment decision-making since 1975. A division of Boston Trust & Investment Management Company with $2 billion in assets under management. Walden blends a disciplined investment style and expertise in portfolio screening with a commitment to use shareholder leverage to improve corporate environmental, social and governance performance and accountability.
SOURCE Walden Asset Management