New York - The US is inching towards UK-style shareholder votes on executive pay, as a means of limiting corporate excess.
Corporate governance campaigners and politicians have been pressuring dozens of companies to introduce the sort of non-binding vote that has pushed executive remuneration to the top of
the agenda at annual general meetings in the UK.
At two major corporations - the giant phone company Verizon and the Blockbuster video store chain - the proposal has already been passed by shareholders.
This has prompted optimism that many more will follow in next year's AGM season.
But the issue may be mandated sooner than that by politicians, because so-called "say on pay" legislation has passed the House of Representatives and is being pushed in the Senate by presidential hopeful Barack Obama.
At Verizon, where the chief executive, Ivan Seidenberg, has taken home US$109 million ($144 million) over the past five years despite presiding over a falling share price, a resolution calling for an annual "say on pay" won 50.2 per cent of the vote.
Amid some 20 similar proposals during this spring's AGM season, several came close to passing.
"The record vote by Verizon shareholders reflects the growing dissatisfaction by shareholders over unregulated and excessive CEO compensation," said Richard Trumka, secretary-treasurer of the AFL-CIO, an association of trade unions.
The average chief executive of an S&P 500 company received US$14.78 million in total compensation in 2006, according to a preliminary analysis by The Corporate Library, the corporate governance campaign group.
This is a 9.4 per cent increase over 2005.
- INDEPENDENT
