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Shareholder Say on Executive Pay by Timothy Smith From the Fall/Winter 2008 issue of ValuesThe government rescue of banking institutions has amplified the public outcry over excessive executive pay. Walden continues to be a leading investor voice on executive compensation accountability through advocacy that supports giving shareholders at all companies an advisory vote on pay packages, known popularly as “Say-on-Pay.” Of nearly 100 resolutions proposed at company meetings in 2008 requesting the advisory vote, average shareholder support exceeded 43 percent and 10 companies received majority votes. Walden re-filed the advisory vote resolution for the 2009 proxy season at Goldman Sachs, after earning 46 percent of the vote in April. Walden has approached additional companies this year with resolutions, including Walt Disney, Hewlett Packard, and Intel. We withdrew a Say-on-Pay resolution we co-filed as part of a coalition at Cisco Systems, after the company committed to hold substantial board and management level discussions with concerned shareholders, participate in an industry-investor consortium addressing the advisory vote, and expand the board’s Compensation Committee disclosure. The context of the advisory vote debate changed in November when President-elect Barack Obama emerged as the victor of the U.S. presidential campaign. Senator Obama (D.-Ill.) was the primary Senate sponsor of Say-on-Pay legislation, previously introduced by Representative Barney Frank (D.-Mass.) in the House, where it was approved by a two-to-one margin. Unlike President Bush who has said he would veto a bill requiring a nonbinding advisory vote by shareholders on senior executive compensation, President-elect Obama is widely expected to sign Say-on-Pay into law in 2009. Meanwhile in November, two-thirds of Sun Microsystems shares were voted in favor of a Say-on-Pay resolution after two previous attempts failed to garner majority support. As many as 100 more resolutions may be in the offing. Astute companies will see the writing on the wall and work with shareholders to ensure a smooth transition.
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