Distribution Network
Content
The insurance company Aflac has become the first big US company to offer its shareholders a vote on executive pay.
The Fortune 200 corporation made the announcement shortly after institutional investors urged the US Securities and Exchange Commission to require public companies to include an advisory shareholder vote on executive remuneration at annual meetings (EP8, issue 10).
The decision was partly a result of a recent shareholders’ proposal, led by Boston Common Asset Management, calling on the company to reveal details of its executive pay plans. From 2009, shareholders will be able to vote on the pay packages of Aflac’s top five executives.
The votes will be advisory, but will allow shareholders to register disapproval if they consider settlements fail to reflect performance. Dawn Wolfe, Boston’s social research analyst, welcomed Aflac’s decision. She said there had been no particular concern that Aflac executives were overpaid, only that shareholders had no voice in the remuneration decisions.
Any switch towards allowing votes on executive pay in the US would bring the country into line with Australia, the Netherlands and the UK, where advisory or non-binding shareholder votes on the topic are required by the regulatory authorities.
More than 121 US companies are facing shareholder resolutions on executive pay in this annual meeting season (see analysis).
Average chief executive compensation in the US is now at least 450 times greater than the average worker’s wage, compared with 45 times in 1980.
The Fortune 200 corporation made the announcement shortly after institutional investors urged the US Securities and Exchange Commission to require public companies to include an advisory shareholder vote on executive remuneration at annual meetings (EP8, issue 10).
The decision was partly a result of a recent shareholders’ proposal, led by Boston Common Asset Management, calling on the company to reveal details of its executive pay plans. From 2009, shareholders will be able to vote on the pay packages of Aflac’s top five executives.
The votes will be advisory, but will allow shareholders to register disapproval if they consider settlements fail to reflect performance. Dawn Wolfe, Boston’s social research analyst, welcomed Aflac’s decision. She said there had been no particular concern that Aflac executives were overpaid, only that shareholders had no voice in the remuneration decisions.
Any switch towards allowing votes on executive pay in the US would bring the country into line with Australia, the Netherlands and the UK, where advisory or non-binding shareholder votes on the topic are required by the regulatory authorities.
More than 121 US companies are facing shareholder resolutions on executive pay in this annual meeting season (see analysis).
Average chief executive compensation in the US is now at least 450 times greater than the average worker’s wage, compared with 45 times in 1980.
Super Featured
No
Featured
No