The chance to say “yea” or “nay” to executive pay may not be driving down CEO compensation, but it’s forcing corporate board members to pay much closer attention to their shareholders.

Three years since the Dodd-Frank Act gave shareholders the right to a nonbinding “say-on-pay” vote, corporate directors have become wary of the warning shot that can be fired when too many investors vote “no” on executive compensation.

“The impact on boards is actually more significant than the impact on pay itself, at least so far,” said Hillary Sale, a law professor at Washington University in St. Louis. “If they get a bad pay vote, next year’s vote will be one targeting them.”

Of the 2,238 say-on-pay votes so far in 2013, 91 percent of companies have received 70 percent shareholder approval or better, according to executive-pay tracker Equilar, a level that Sale sees as a threshold for good corporate governance.

Nationally, only 59 companies have seen shareholders reject their pay packages, but 200 companies have failed to reach the 70 percent threshold. Even profitable companies can run afoul of institutional investors if they’re not careful. Say-on-pay votes have given mutual funds, pension funds and insurance companies the chance to assert themselves when they feel the boss’s pay has decoupled from the company’s performance.

Target Corp. got 91.3 percent shareholder approval for its initial say-on-pay proposal but support dropped the next year to 82.5 percent. This year, two firms that advise shareholders on compensation — Institutional Shareholder Services, or ISS, and Glass Lewis — gave Target poor marks on pay. Despite Target’s healthy stock price, investors in June approved the retailer’s executive compensation policies with only 52.1 percent of the vote. It was a stunning rebuke to a company Wall Street has long regarded as one of the best-run in the country.

“Anything under 70 percent is really bad,” Sale said. “You’ve got to be on this constantly, you have to be in touch with your institutional shareholders, and you can’t just do it around the annual meeting.”

Best Buy Co. Inc. also failed its say-on-pay vote a year ago in the interim between the ouster of CEO Brian Dunn and the August 2012 hiring of Hubert Joly, getting 38.2 percent approval rating. The company’s board overhauled its compensation plan in light of the turnover.

Before this year’s annual meeting, Best Buy’s compensation committee let shareholders know that proxy advisory firm Glass Lewis was recommending shareholder support for this year’s say-on-pay proposal. But another proxy advisory firm — ISS — recommended a no vote. Best Buy offered additional justifications for support. The company’s appeals to shareholders helped it achieve an 83 percent approval rating at this year’s annual meeting.

“It certainly has done something, and the something it’s done has been it’s changed the dialogue between shareholders and the company,” Sale said.

Whether that dialogue is fruitful is another question, said Ian Maitland, a business ethics professor at the University of Minnesota’s Carlson School of Management.

Congress, responding to public outrage over executive pay, has created a way for certain powerful investors to influence boards of directors. “There’s been a shift in the power of the actors, presumably away from boards and to institutional investors, but not necessarily to investors generally,” Maitland said.

The motives of major shareholders can be “ambiguous,” Maitland said, and unlike boards, they have no fiduciary duty to shareholders in general.

“I think that most investors don’t pay too much attention to compensation packages, except in some extreme cases,” he said.

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