Maybe you heard this last night too: A new national poll by CNN/Opinion Research Corp. shows that the majority of Americans think Washington will make better moves to overcome the recession than Wall Street, the banks or the auto makers. And that's even among Republicans. The financial meltdown, exorbitant CEO pay and the well-publicized scandals involving Madoff and others have made Americans angry, disgusted and searching for more accountability. And this is just what some financial advisors are hearing from clients, too.
"Many clients are interested in what banks and other institutions are paying out in executive compensation," notes Lauren Compere, senior vice president in charge of shareholder advocacy at Boston Common Asset Management, a socially responsible investing firm in Boston with $983 million in assets under management. About half of the firm's clients are high-net-worth individuals and the rest are institutions.
And Compere is one who thinks issues such as executive compensation are going to be on the radar of a broader set of investors going forward. "I think every investor wants a well-run company, good corporate governance, real oversight of executive compensation and disclosure," she adds.
The pressure for more oversight of executive pay is sure to continue for some time, not only from Washington but also from shareholders themselves: The Social Investment Forum, the leading U.S. membership association for socially and environmentally responsible investment professionals and institutions, reports an increase in CEO-pay-related shareholder resolutions heading into the 2009 proxy season.
Last month, the Interfaith Center On Corporate Responsibility said that a network of institutional and individual investors had filed shareholder resolutions at more than 100 U.S. corporations as part of the 2009 proxy-season efforts to press companies to give shareholders an annual advisory vote on executive compensation packages.
2009 filings at major companies include Apple, Bank of New York Mellon, American Express, Coca-Cola, AIG, Capital One, Hewlett-Packard, Intel, Wells Fargo, AT&T, Exxon Mobil, Raytheon, General Electric, Goldman Sachs, Home Depot, IBM, Merck, UnitedHealth, Time Warner, Citigroup, ConocoPhillips, CVS Caremark, Morgan Stanley, Valero Energy, YUM! Brands, Occidental Petroleum, Wal-Mart, Rite-Aid, KB Homes, Ryland Group and Charming Shoppes.
Calls for accountability and transparency aren't just about executive pay. On Monday, shareholder advocates called on 19 financial companies that received
more than $1 billion under the U.S. Treasury Department's Troubled
Asset Relief Program to disclose and require board oversight of their
political spending with corporate funds.