For all the complaining that investors and Foolish analysts do about executive pay, it might come as a surprise that investors rejected two out of the three "say on pay" proposals at pharmaceutical companies' annual meetings this week. Shareholders at both Johnson & Johnson
My guess is that investors figured the proposals, which only give shareholders an advisory role, didn't have enough teeth to make them worth the effort. Maybe, having just experienced Earth Day, investors figured they'd save the paper.
There are probably better ways to get investors' opinions on shareholder pay than a yes/no vote at companies' annual meetings anyway. Amgen created an online survey to get investors' opinions on executive pay, and Prudential Financial
Of course, investors have always had a voice: their sell button. Don't like the pay that the board is bestowing on Starbucks'
"Say on pay" sounds good -- and catchy besides -- which is probably why lawmakers tout it, but the reality of the situation is that an advisory role isn't worth very much. It would certainly be a good start for investors to be able to trust management to increase shareholder value, and the board to pay executives the appropriate amount. If that's not occurring, however, it's probably better for most investors to move on, rather than try and change things from the inside. We can't all be Carl Icahn.
More Foolishness on CEO pay: