White House plans to give shareholders a greater say on executive compensation and to make committees that set pay levels more independent represent vindication for shareholder activists such as Gerald Armstrong of Denver.
For years, Armstrong has fought to get shareholders a greater say on many issues, including executive pay, by placing measures on company proxies.
Increasingly, his measures are receiving a larger share of votes, despite being nonbinding and despite the large share of votes that automatically follow management recommendations, he said.
“It is not to set the salary but to make a recommendation about what is being paid,” he said.
Armstrong said some companies plead with him to take the measures off the ballot and that many executives give him the cold shoulder at annual meetings for raising the issue.
“Directors are paid so well, they can’t be considered independent,” Armstrong said of one company he recently targeted with a “say-on- pay” measure.
Don Childears, president and chief executive of the Colorado Bankers Association, said he supports greater transparency on pay issues.
But he questions how effective a nonbinding shareholder vote on compensation will be in practice.
“It actually reduces the board’s accountability by letting it decide compensation so long as it conducts a shareholder straw poll, which it can ignore,” he said. “Popular opinion isn’t necessarily the way to make good decisions.”
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
