Close this search box.
Close this search box.

Is Shareholder Support to Say-on-Pay Waning?

Although shareholders are seemingly up in arms against the skyrocketing CEO pay, the fervor hasn’t translated into much action at the companies. Recent figures from expert groups such as RiskMetrics and Corporate Library reveal a very bleak picture for the 'say on pay’ proposals triggered by shareholder activists so far this year.

Although shareholders are seemingly up in arms against the skyrocketing CEO pay, the fervor hasn’t translated into much action at the companies. Recent figures from expert groups such as RiskMetrics and Corporate Library reveal a very bleak picture for the ‘say on pay’ proposals triggered by shareholder activists so far this year.

Halfway past through the annual shareholder-meeting season this year, say on pay proposals on executive pay packages have failed to generate widespread support. According to Corporate Library, a watchdog on corporate governance, out of the nine proposals approved so far in 2008 only two have been adopted, while in 2007 at least three companies had adopted the shareholder’s non-binding advisory vote. The two companies, which have adopted the proposals, are Apple and Tech Data Corporation.

Companies That Have Registered a Majority Win




Alaska Air Group, Inc.



Apple Inc.



Ingersoll-Rand Company Limited



Lexmark International, Inc.



Motorola, Inc.



PG&E Corporation



Rackable Systems



South Financial Group, Inc. (The)



Tech Data Corportion






Activision, Inc.



Blockbuster Inc.



Clear Channel Communications, Inc.



Ingersoll-Rated Company Limited



Motorola, Inc.



Par Pharmaceutical Companies, Inc.



Valero Energy Corporation



Verizon Communications Inc.



Source: Corporate Library

Interestingly despite garnering majority votes of more than 50 percent, neither of the companies such as Alaska Air Group (55 Percent), Ingersoll-Rand (54 Percent), Lexmark International 59.8 percent) Motorola Inc 54 percent, among others have expressed their willingness to adopt the vote. 

“Special mention should be given to two companies at which shareholder support has topped 50 percent for two years running: Ingersoll-Rand Company and Motorola. Despite the votes, there has been no implementation of €˜Say on Pay’ votes at either company. Further, despite shareholders having approved proposals by a majority vote in 2007 at Activision, Valero Energy Corporation and Clear Channel Communications, the companies have not implemented €˜Say on Pay,’ the corporate library said in its Analyst Alert last month. 

Other firms where advisory vote proposals have gained over 50 percent support include South Financial Group (51.9percent), PG&E Corp (52.7 percent) and Rackable Systems (51.4 percent).

Additionally, the say on pay proposal outcome at some of the financial companies is all the more discouraging for the advocates of the advisory vote. Companies such as Citigroup, Merrill Lynch, Morgan Stanley, Wachovia and U.S. Bancorp have witnessed less support this proxy season than they did last year. According to Corporate Library statistics shareholders at Citigroup rejected a say-on-pay proposal, with 42 percent of shareholders voting in favor of it. That number is down from 46 percent support last year. A similar proposal at Merrill Lynch garnered support from 37 percent of its proxy voters, down from 46 percent last year.

Percentage Of Change In The Shareholder Support For ‘Say On Pay’ At Financial Institutions From 2007 – 2008

Company Name

2008 Vote

2007 Vote



Capital One Financial




State Commercial Banks





National Commercial Banks  

JPMorgan Chase




National Commercial Banks 

Merrill Lynch




Security Brokers, Dealers & Flotation Companies 

Morgan Stanley




Security Brokers, Dealers & Flotation Companies 





National Commercial Banks





National Commercial Banks

wells Fargo




National Commercial Banks

Source: Corporate Library

Even though investors blasted executives at the annual meetings of Citigroup and Wachovia “say on pay” proposals at both companies won 20 percent fewer votes than they did a year ago,” RiskMetrics research said.

Shareholders will vote on the proposals again this year at Valero and Clear Channel. Three companies with near-majority support in 2007 (Symantec, 48.6 percent; Sara Lee, 48.5 percent; and Cisco, 47.7 percent) are due for fall annual meetings and it will be interesting to see if €˜Say on Pay’ proposals are reintroduced and can finally achieve majority support.

This year only a handful of companies including Verizon, Blockbuster, Par Pharmaceutical Companies and the health insurer Aflac Inc. are letting the issue to go to a shareholder vote.

However, the overall support for the say on pay campaign which is in its third year has grown in terms of the number of proposals made this year reaching 76 (as of June 30) “a large increase over the 53 that made it to the proxy in 2007,” says the Corporate Library alert.

Despite the overall increases in shareholder support, the voting results are mixed at 27 companies with €˜Say on Pay’ proposals on their proxies in both 2007 and 2008. Out of the 27, 17 companies show a decrease in support, while eight show an increase, and two other companies depicted no effective change. 

Support At Companies Voting In 2007 & 2008



Increased Support


Decreased Support






Source: Corporate Library

The reason why “say on pay” has failed to generate wider support has left experts wondering.

Richard Ferlauto of the American Federation of State, County and Municipal Employees, one of the main proponents of say-on-pay votes, blames the rise of the e-proxy this season for posing a hurdle to “say on pay.” The federation, one of the nation’s largest labor unions, is a leader in the rights of shareholders.

But some shareholder activists and corporate governance experts said the lukewarm support highlighted say-on-pay’s shortcomings. Critics said a simple up-or-down vote makes it hard for corporate directors to understand what shareholders find objectionable in often complex compensation packages. “I think it’s a half step. It doesn’t get us ultimately to where we need to be,” says a report in Washington Post quoting Charles Elson, director of the Center for Corporate Governance at the University of Delaware.

Corporate Library also believes that the difficulty in understanding the complex compensation packages could have resulted in the decreased support for say-on-pay proposals. “CEO pay is often cyclical depending on when CEOs decide to exercise options and when the vesting of restricted stock occurs. It is possible that these facts have played a role in the decreased shareholder support for €˜Say on Pay’ at these financial institutions, says Damion Rallis, Research Associate, Corporate Library.


  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events


    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)


    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.