High pay for top corporate officers has always been a source of concern for investors in the US, especially during annual meeting season. In an article from the Wall Street Journal, Joann S. Lublin discusses the aftermath of failing say on pay.
Lublin comments on companies such as Tutor Perini, Cogent Communications and Oracle who have failed say on pay more than once:
“After losing a pay vote, many boards work hard to overcome investor dissatisfaction by conferring with major stockholders or altering some pay practices. Those efforts don’t always succeed, however.”
According to Lublin, these companies are failing because of the disconnect between the company performance and the executive pay. This disconnect has forced companies to reconsider the way they are managing shareholder outreach and engagement. First, focus on the outreach and listen to what the stakeholders have to say, and then think about how you can address these issues. Use the proxy statement as a platform for communication, reinforcing the link between executive pay and company performance.
Read the full article here.