While gaining among corporations in general, “Say on Pay” support is losing favor among financial companies, according to a new report by The Corporate Library.
The shareholder watchdog group notes that “Say on Pay” lost support among eight major financial firms during this proxy season. The list includes Citigroup, Inc., Capital One Financial Corp., JP Morgan Chase & Co., Merrill Lynch, Morgan Stanley, U.S. Bancorp, Wachovia and Wells Fargo & Co.
Overall support, however, gained slightly from 41 percent in 2007 to 42 percent this year, The Corporate Library says.
“Say on Pay,” which involves shareholders voting on non-binding resolutions to affirm executive compensation, has gained currency as C-Suite salaries and other forms of remuneration have skyrocketed, especially at large, well-known companies. Often, the total compensation does not reflect how well a top executive has performed.
One could argue that top execs at big financial firms such as Merrill Lynch and Citi haven’t exactly been soaring successes. Wachovia announced $8.86 billion in second quarter losses just this week.
The Corporate Library posits that the diminished support for “Say on Pay” at big banks and investment houses might actually be linked to a decline in remuneration among executives precisely because of poor performance. In any event, its a trend worth watching.
