Thursday, February 16, 2012

Executive compensation flagged by pension managers

Private sector pension managers are growing impatient with boards that fail to align executive pay with shareholders’ interests, according to the Canadian Key Proxy Voting Survey. The Shareholder Association for Research and Education (SHARE) survey looks at the voting records of 32 investment managers and proxy voting services.

More than one-third of the issues surveyed in 2011 were votes on executive compensation. Participating companies voted against management more often than they voted in favour.

Despite the generally tough stance, a proposal that challenged companies on the growing gap between executive compensation and average wages received support from only 1 in every 3 surveyed firms that voted on it.

“This muted response to the pay disparity proposal indicates that few firms answering the survey have an appetite for calling market norms into question,” said Laura O’Neill, SHARE’s Director of Law and Policy.

The survey examines voting decisions on about two dozen issues that attracted relatively strong opposition from shareholders, SHARE said in a news release.

The survey also includes data on how firms make their voting decisions.

“Responses to the survey provide evidence that Canadian pension fund asset managers are devoting more attention to proxy voting and disclosing their decisions,” said Charley Beresford, Executive Director of the Columbia Institute, a survey sponsor. “Over the past three years, for example, an increasing percentage of firms report that they have proxy guidelines, that they review them every year and that they make them available to the public.”

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