‘Say on Pay’
“We believe our approach to executive compensation––evaluating companies on a case-by-case basis and conducting direct, ongoing engagement––is the most effective way to support practices that reward sustainable shareholder value,” Bess Joffe, TIAA-CREF’s head of stewardship and corporate governance, said in an e-mail.
Shareholder “say on pay” was mandated in 2010 by the Dodd- Frank financial reform law, which calls for such votes at least every three years. Ninety percent of companies in the Standard & Poor’s 500 Index hold them annually, according to data compiled by Bloomberg.
Failing votes are rare. Support for pay packages in the S&P 500 index averaged 92 percent in each company’s most recent vote, Bloomberg data show. Only three companies in the index had a majority of shareholders disapprove.
“These companies will often say they are engaging with boards and that is why they’re not voting against plans," Weaver said of mutual fund managers. “The problem is that so-called engagement takes place behind closed doors and is hidden from public view.”
BlackRock CEO Larry Fink was awarded $26.3 million in 2014, making him the 118th-highest-compensated executive on the Bloomberg Pay Index. At least 85 percent of BlackRock’s investors have supported its pay practices every time it has held votes on the matter. Vanguard isn’t publicly traded and doesn’t disclose CEO Bill McNabb’s pay.
As You Sow is a nonprofit that promotes corporate social responsibility through shareholder advocacy.