May 25, 2012
By Len Boselovic
Opinions vary on the impact of "say on pay," nonbinding shareholder referendums on the way public companies pay their executives. The votes are in their second year after being mandated by Congress when it enacted the Dodd-Frank financial reform legislation in 2010.
While shareholders overwhelmingly approve the majority of pay plans, companies whose compensation practices are narrowly approved or rejected are mending their ways in hopes of garnering more support at the polls next year.
"It's evolution, not a revolution," said Todd Sirras, with Semler Brossy, a Los Angeles compensation consultant.
Others say the exercise is useful because it highlights the issue and encourages discussions between companies and shareholders....
Southern Methodist University business professor Mel Fugate said the firms' recommendations prompt disparate shareholders to vote as a bloc on pay, re-electing directors and other issues.
"They are essentially organizing larger masses of shareholders that otherwise would not be organized," he said....