Investors Appeal Financial Firms on Say on Pay

Investors are coming together and speaking out on the issue of Say on Pay. According to the press release below, approximately thirty investors have sent letters to 17 different financial firms urging them to implement Say on Pay this proxy season. ShareOwners endorses this initiative and urges others to vote in favor of the resolutions.

"Say on Pay" is a non-binding advisory vote on executive compensation - it allows investors to voice their concerns about executive pay and lets the board of directors know that investors will not tolerate poor policies that reward failure. Pay should be aligned with company performance, and if you lose money while the executives get huge bonuses, you should be able to vote against those practices.

For more, see the press release below:

For Release: January 28, 2010

Contact:
Timothy Smith (617) 726-7155
(tsmith@bostontrust.com)

INVESTORS APPEAL TO 17 FINANCIAL FIRMS TO ADOPT ADVISORY VOTE ON EXECUTIVE COMPENSATION

BOSTON, MA – January 28 – Approximately 30 investors, deeply involved in the issue of Say on Pay, have sent letters to 17 financial institutions urging them to implement an annual Advisory Vote on executive pay starting with the upcoming 2010 proxy season.

This appeal comes in the midst of a heated debate over Wall Street bonuses and follows recent decisions by Goldman Sachs, State Street Corporation and Bank of New York Mellon to implement the Advisory Vote in their 2010 proxies.

To date, over 40 companies have agreed to voluntarily implement Say on Pay and hundreds of other companies, having received TARP funds, are required to include the Advisory Vote in their proxies.

This is a particularly relevant request to financial companies, most of which were required to implement Say on Pay last year as TARP recipients. But upon repaying the TARP funds, most banks have reverted to their past position of refusing to hold an Advisory Vote.

Shareholder resolutions on Say on Pay have been a high priority for investors. In 2009 close to 100 companies received such shareholder resolutions. Over 70 proposals came to vote and averaged more than 46% support with 24 majority votes, indicating significant investor support for this reform.

In addition, the House of Representatives passed a bill requiring advisory vote and a bill is pending in the Senate.

The letter states “Adopting Say on Pay is not only an idea whose time has come, it is a reasonable and modest step.”

Many of the banks receiving the letter have also received shareholder resolutions on various executive compensation reforms including Say on Pay.

The accompanying link includes a model letter with signatories and the 17 financial firms listed.
http://www.waldenassetmgmt.com/social/action/library/Letter_SOP_201...

Among the letter signatories, are major pension funds such as CalSTRS, CalPERS, TIAA-CREF, State of Connecticut, AFSCME, the United Methodist Church General Board of Pension & Health Benefits, the Council of Institutional Investors and a cross-section of religious investors, trade unions and socially responsible investment firms such as Walden Asset Management.

Among the 17 companies receiving the letter are JPMorgan Chase, Morgan Stanley, Citigroup, Wells Fargo, Bank of America and American Express.

Walden Asset Management, the State of Connecticut Treasurer’s Office and AFSCME coordinated the letter.




FYI-The link includes the actual letter and signatories. At present the letter is going to the following banks. It will go to the CEO, and Chairs of the Comp and Governance Committees.

JPMorgan Chase
Morgan Stanley
State Street
Bank of America
Citigroup
Wells Fargo
U.S. Bancorp
Waddell & Reed
Northern Trust
BB & T
Capital One Financial
American Express
PNC Financial Services
SunTrust
Fifth Third Bancorp
Comerica
KeyCorp
Regions Financial