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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhy isn't there more focus on shareholders' say on executive pay?
Article by: ADAM BELZ
Shareholders of TCF Financial Corp. have repudiated the banks pay for its executives, according to a filing with the Securities and Exchange Commission.
In a nonbinding vote, 54 percent of the companys shareholders opposed its pay packages for top executives, including $4.8 million in total 2013 pay for William Cooper, the Wayzata-based companys chief executive and chairman.
We respect the vote of our shareholders on this matter, TCF Financial said in a statement. Based on the outcome of the nonbinding vote, we intend to meet with many of them and will then move forward with addressing any concerns regarding TCFs incentive compensation model.
The chance to say yea or nay to executive pay was given to shareholders by the Dodd-Frank Act in 2009. The vote is nonbinding, but corporate directors have become wary of the warning shot that can be fired when too many investors vote no to their pay packages.
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http://www.startribune.com/business/256774891.html
This is a small financial institution, but it's amazing that these shareholder votes don't get more press coverage. At the very least, more focus would serve to isolate the greed of top executives.
CEO pay at top companies now 331 times that of average worker, 774 times that of minimum-wage worker
http://www.dailykos.com/story/2014/04/16/1292207/-CEO-pay-at-top-companies-now-331-times-that-of-average-worker-774-times-that-of-minimum-wage-worker
Look at the jump from 1983 to 1993.
Teamsters Applaud SEC's Navistar Decision Upholding Dodd-Frank
http://teamster.org/content/teamsters-applaud-secs-navistar-decision-upholding-dodd-frank
Robert Reich: The Significance of Citigroups Shareholder Revolt
http://www.democraticunderground.com/1002579118
Findings bode well for mandatory say-on-pay provisions of financial reform bill
July 21 - When Robert I. Toll stepped down as CEO of luxury-home builder Toll Brothers last month, he could look back over a career replete not only with riches but with his industry's most coveted awards for excellence. But that didn't save him from a 73% pay cut three years ago, from $26 million to $7 million, after owners of one fourth of Toll Brothers' shares withheld their votes to re-elect the head of the firm's compensation committee. At the time, a proxy advisory firm concluded that Mr. Toll's average compensation over the previous three years had been 564% above the median paid to CEOs at peer companies...shareholder "vote-no" campaigns similar to the one at Toll Brothers have turned out to be a highly effective way of bringing stratospheric CEO paychecks closer to earth, according to new research. A study to be presented at the annual meeting of the American Accounting Association (San Francisco, Aug 1-4) finds that such campaigns resulted on average in a single-year CEO pay drop of about $7.3 million (about 38%) in firms where pay was excessive . Companies that sustained hefty CEO pay reductions during the study's time span (1997-2007) included Yahoo, UnitedHealth, United Natural Foods, Sanmina-Sci, Saks Inc, Sprint, Qwest Communications, Legg Mason, Lennar, KB Home, Constellation Energy, and Apple.
In addition, the study finds that pay-design proposals by institutional investors resulted in average pay reductions of about $2.3 million in companies with excessive CEO pay. Excessive pay is an amount greater than what would be expected on the basis of a number of standard economic determinants, including firm size, return on assets, stock performance, and industry.
The findings would seem to bode well for the increase in shareholder say on pay likely to result from the major financial-reform bill that President Obama signs into law today. The new legislation requires shareholder advisory votes on executive pay at least once every three years (and, subject to the decision of the shareholders, possibly as often as every year) in all companies or categories of companies not specifically exempted by the SEC.
"This study casts doubt on the two most frequent criticisms of increased shareholder say on pay -- either that it will be largely ineffective or that it will lead to radical changes dictated by unions or other special-interest groups," comments Fabrizio Ferri of New York University, who carried out the new research with Yonca Ertimur of Duke University and Volkan Muslu of the University of Texas at Dallas.
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http://aaahq.org/newsroom/shareholdervotes.htm
wercal
(1,370 posts)That the 401k provision gave rise to the mutual fund and the 'absentee' shareholder. It is practically impossible for shareholders to track what a company does day to day, when they own slivers of hundeds of companies. So executive pay shot up.
Don't know how to fix it...but I think the linkage is there.
ProSense
(116,464 posts)lonestarnot
(77,097 posts)Two recent examples locally, Phoenix City Council gave City Manager a raise from $278K to 315K a year while people go without jobs and an agency in Phoenix allegedly maintained secret death panel lists for managerial bonus pay. Fuckers shouldn't be allowed to make two or three self-perpetuating fortunes off one existing fortune because they are able to cheat through current law or just thug around it.
ProSense
(116,464 posts)"Two recent examples locally, Phoenix City Council gave City Manager a raise from $278K to 315K a year while people go without jobs and an agency in Phoenix allegedly maintained secret death panel lists for managerial bonus pay. Fuckers shouldn't be allowed to make two or three self-perpetuating fortunes off one existing fortune because they are able to cheat through current law or just thug around it."
...but that pales in comparison to multi-million dollar executive pay, especially as it compares to their employees.
McCamy Taylor
(19,240 posts)It makes the whole concept of stocks and shares seem pretty shady.
ProSense
(116,464 posts)jwirr
(39,215 posts)corporations today?
ProSense
(116,464 posts)"Great question in fact why isn't there more focus on shareholders in many of the issues with corporations today?"
...me, accountability works both ways.
Apple CEO: Climate Change Deniers Should Take Their Money Out Of Apple Stock
http://www.democraticunderground.com/10024585561
Now if shareholders would also hold companies accountable for their environmental practices.