Investors seek more input on executive pay
Shareholders for companies such as Qwest are seeking oversight
over compensation packages at upcoming annual meetings.
By Steve Raabe
Sunday, April 3, 2009
Disgruntled investors increasingly are calling for shareholder
oversight of executive compensation, putting large businesses on
notice that corporate salaries must reflect companies' financial
Qwest shareholders vote May 13 to put them among the first
nationally to have a voice on the issue.
The "say on pay" provision proposed by a Minnesota shareholder asks Qwest's board of
directors to submit the salaries for its top executives to a
nonbinding annual vote by owners of Qwest stock.
"Executive compensation is a very hot issue among investors,"
said Charles Elson, director of the
John L. Weinberg Center for Corporate Governance at the University of Delaware.
"Qwest has had some corporate governance and compensation issues
that go back to the Nacchio era," Elson said in a reference to
Qwest's former chief executive who received salary, bonuses and
stock awards totaling more than $200 million during his
Joe Nacchio is serving a six-year federal prison term for
illegal insider trading.
Current Qwest CEO Ed Mueller received $10.4 million in total
compensation in 2008.
The Qwest say-on-pay vote and a related provision on shareholder
approval of executive retirement benefits put the
telecommunications company in the spotlight this month as a
number of Colorado
public companies hold annual meetings.
Most of the meetings lack the topical interest of executive
compensation, focusing instead on the typical functions of
electing directors and appointing auditors.
Few companies nationwide have approved shareholder oversight on
compensation, but the votes are getting tighter every year,
Shareholders at DuPont recently defeated a say-on-pay proposal
with 53 percent of shares voting against it and 46 percent in
"If 20 percent of your shareholders are voting for these
proposals, that's a big expression of support," Elson said.
Aflac, Blockbuster and Verizon Communications are among the
handful of companies that have agreed to give investors an
advisory voice on compensation.
Corporate governance research firm RiskMetrics said shareholders
this year have filed more than 100 resolutions asking for a say
on pay. Analysts expect some of the measures to pass as
investors show displeasure at high compensation while stock
prices lag from economic weakness.
In her proposal, Qwest shareholder Mary Ann Neuman of New Hope, Minn.,
said the company's executive salaries and benefits "stand out as
Qwest, in its proxy statement filed with the Securities and
Exchange Commission, called its compensation "thoughtful" and
"in the best interest of our stockholders."
It recommends a "no" vote on the measure.
Steve Raabe: 303-954-1948 or