Thus far during the 2011 proxy season approximately 2500 of the Russell 3000 index companies have reported a Say-on-Pay vote. Say-on-Pay is a nonbinding vote by a company’s shareholders on its executive pay program.1 A majority of the votes cast at approximately 98½ percent of these companies was favorable to the executive compensation program at the company. In fact, at the companies with favorable say-on-pay votes an average of 90 percent of the votes cast were in favor of the compensation program under review.
Those favorable votes occurred at the same time that large institutional shareholder advisors such as Institutional Shareholder Services Inc. (ISS) and Glass, Lewis & Co., LLC (GL) were recommending that shareholders vote against executive pay at hundreds of these public companies. ISS recommended negative votes at 340 companies (as of Sept. 1) and GL recommended negative votes at 474 companies (as of June 30).
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