Snow and ice may still cover much of the United States, but the first metaphorical green shoots of this year's proxy season already herald fertile ground for vocal shareholders.
Let the defiance commence
The Dodd-Frank Act requires that public companies hold say-on-pay votes at their 2011 annual meetings, as well as "say when" votes, in which shareholders state their opinion on how frequently to vote on the issue going forward. Among other organizations, RiskMetrics is closely tracking these developments.
In the first such "say when" vote for an S&P 500 company, shareholders shot down Monsanto
Shareholders at Costco
In another dramatic development, not only did shareholders reject Jacob Engineering's
The season's heating up
A group of 39 institutional investors recently issued a public call for corporations to support annual advisory votes on executive compensation. This group, which includes large investors like CalPERS, Calvert Asset Management, and Pax World, represents about $830 billion in assets.
Furthermore, big mutual funds like Vanguard, State Street, Fidelity, and Putnam have indicated they support annual frequency.
This week, the Wall Street Journal reported that Wall Street pay reached a record-breaking $135 billion in 2010 -- interesting timing, given the current spotlight on "say on pay." The article specifically mentioned a 67% increase in total compensation for Bank of America's
These companies are responding to regulatory and shareholder scrutiny by using more deferred compensation and other ways to try to convince shareholders they've got an eye on long-term performance. Shareholders don't seem to be buying it. Big banks' reputations aren't out of the woods yet, given recent reminders of 2008's ugly and avoidable financial crisis.
A great, even historical, time to be an investor
Proxy season is no longer solely of interest to hardcore SEC filings geeks. Shareholders are gaining a greater voice than ever before, and it looks like corporate managers and boards will increasingly hear that the status quo is no longer good enough. The calendar may still insist that it's winter, but for investors, it's starting to feel like springtime.
Check back at Fool.com every Wednesday and Friday for Alyce Lomax's columns on corporate governance.
Costco is a Motley Fool Inside Value pick and a Motley Fool Stock Advisor recommendation. Motley Fool Options has recommended a synthetic long position on Monsanto. The Fool owns shares of Bank of America and Costco, and also has a short position on Bank of America through a separate account in its Rising Stars portfolios. Try any of our Foolish newsletter services free for 30 days.
Alyce Lomax does not own shares of any of the companies mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.