Sunday, May 3, 2009

Compensation Proposals in 2009 Proxy Season

With the hammering that many stocks took last fall, and the intensifying scrutiny and criticism of executive pay in financial services and other industries, it’s probably not surprising that the number of compensation-related shareholder proposals appears to be up this proxy season.

Executive compensation consultants Towers Perrin suggest in a new paper that while it’s far too soon to predict the outcome of this season’s voting, early votes suggest that these proposals may garner as much, if not greater, support in today’s contentious shareholder environment than in past years. How companies respond to this year’s voting also remains to be seen, although it’s likely that many boards will be paying even closer attention to shareholder views than in the recent past as a result of changes in several RiskMetrics Group (RMG) policies related to executive pay.

Posted by Edward Ferris, a Partner with Hedge Fund Solutions, LLC. Edward is an expert on shareholder activism and , in particular, it's impact on organizational dynamics.