NEW YORK — TIAA-CREF issued a revised corporate governance and proxy-voting policy, its first revision since 2003, said John C. Wilcox, senior vice president and head of corporate governance. The policy covers new areas including annual nonbinding vote on executive compensation, which it generally supports.
TIAA-CREF will now generally support proposals seeking majority-vote bylaw amendments, even if a company already has a form of majority-vote policy, Hye-Won Choi, director-corporate governance and senior counsel, said in an interview. Previously, it had generally supported companies that voluntarily adopted some form of majority vote and not additional shareholder proposals on the issue. “It’s an evolution of the issue,” she said.
TIAA-CREF also reaffirmed its policy of engagement with companies rather than divestment of their securities.
Oxley opposes Frank’s compensation vote bill
WASHINGTON — Michael G. Oxley, former U.S. representative and the co-author of the Sarbanes-Oxley corporate reform act, opposes a bill sponsored by Rep. Barney Frank, D-Mass., that would require companies to have an annual non-binding vote on executive compensation.
“I don’t think it is a good idea,” Mr. Oxley said in an interview following his speech March 8 at a Chicago corporate governance conference sponsored by the law firm of Foley & Lardner.
“The SEC reform (providing for more executive pay disclosure) is just coming into play,” Mr. Oxley said. “The bill is putting the cart before the horse. It (the new SEC disclosure rule) needs a chance to work itself out” in the market.
Mr. Oxley, who retired from Congress in January, will join the law firm of Baker Hostetler as an attorney effective March 12, he said.
With CEOs, outsiders cost more than hiring from within
PORTLAND, Maine — CEOs recruited from outside the company are much more expensive than those hired from within, indicating the high cost of poor succession planning, according to a study released by The Corporate Library.
The “average total compensation of outside-appointed CEOs was 2.6 times more than inside-appointed CEOs” in 2005, according to a statement about the analysis. “One of the main causes of the gap is the notoriously excessive ‘golden hellos’ that companies offer in order to lure outside candidates.”
The Corporate Library’s analysis is based on 52 CEOs of S&P 500 companies — 32 appointed from inside positions and 20 appointed from outside the company.
