Dow Chemical shareholders OK say on executive pay

Dow Chemical shareholders narrowly approved a proposal Thursday to have nonbinding say on executive compensation.

The vote at the annual meeting in Midland, Mich., comes after a very tough year for the nation's largest chemicals maker and its chief executive, Andrew Liveris.

Dow shareholders can't reject pay packages awarded by the company, but can say each year if they find them excessive.

The proposal barely passed, with 50.9 percent of the shareholders who voted approving the plan.

"Investors are increasingly concerned about mushrooming executive pay especially when it is insufficiently linked to performance," supporters said in a statement that was filed with the Securities and Exchange Commission.

Liveris and the rest of the board of directors had recommended shareholders reject proposal, saying it could hinder Dow's ability to retain talented executives.

Liveris received compensation valued at $12.8 million in 2008, a 14 percent decrease from the $14.9 million he received the previous year.

Shareholders also now have the right to call a special meeting if 10 percent of the outstanding shares request it. That proposal was approved by 58.5 percent.

Liveris, addressing shareholders, was contrite over what many considered a botched $16.5 billion buyout of specialty chemicals maker Rohm & Haas this year.

The companies settled just before the case went to court, but Dow was forced to go forward with a deal that added billions in debt to the balance sheet.

The Rohm & Haas deal was thrown into jeopardy when a proposed $17.4 billion joint-venture in the Middle East collapsed late last year, a deal from which Dow had expected to collect billions.

Dow cut its dividend for the first time in company history in order to close on the Rohm & Haas deal.

"This was a tremendously difficult decision, but given the world's economic climate it was the prudent one," Liveris told shareholders.

Dow hopes to get debt levels under $4.2 billion within 90 days and is working hard to maintain an investment-grade rating, he said.

"We don't have a liquidity issue," Liveris said. "We have the strength to meet all of our financial commitments."

Rohm & Haas, he told shareholders, will "transform Dow into an earnings-growth company."

Sales for Dow and other chemical makers have plunged because of the global economic downturn. Dow has cut more than 10 percent of its work force and shuttered plants.

Shares of Dow rose 95 cents, or 6 percent, to $16.53 in afternoon trading. The stock has traded between $5.89 and $43.43 in the past 52 weeks.