WASHINGTON — Unwarranted compensation awarded to CEO Angelo R. Mozilo of Countrywide Financial Corp. and former CEOs Charles Prince at Citigroup Inc., and E. Stanley O'Neal of Merrill Lynch should be returned to shareholders, Nell Minow, editor and co-founder of The Corporate Library, testified March 7 before a hearing of the U.S. House Committee on Oversight and Government Reform.
According to a statement by TCL, Ms. Minow told the panel that “the undue compensation awarded to these failed CEOs (among others) should be returned to shareholders. They should be liable for providing false and misleading statements to investors and held accountable for the impact of their poor strategic decision-making policies.”
The hearing examined the compensation and retirement packages granted to the three CEOs of corporations “deeply involved in the current mortgage crisis,” according to a committee statement. Messrs. Mozilo, Prince and O'Neal were among others scheduled to testify before the committee today.
The “first and foremost” responsibility of the companies' directors is to hold the CEOs accountable, Ms. Minow testified. “If they fail, it is up to the shareholders to replace the board, and it is up to lawmakers and regulators to make sure they have the power to do that.”
TORONTO — Bank of Montreal and Bank of Nova Scotia shareholders on March 4 defeated proposals that called for an annual non-binding shareholder vote on executive pay, according to Shareholder Association for Research and Education, an association that works with institutional investors on corporate governance and social responsibility issues. The Bank of Montreal vote was 66% to 34% and Bank of Nova Scotia vote was 61% to 39%.
The Ontario Teachers Pension Plan, Toronto, voted against the proposals, according to a statement by the C$106 billion (U.S. $108 billion) plan.
Ralph Marranca, director-media and public relations for the Bank of Montreal, and Ann DeRabbie, senior manager-public affairs of the Bank of Nova Scotia. couldn't be reached for comment. Both banks are based in Toronto.
WASHINGTON — The SEC rejected efforts by Pulte Homes Inc., Bloomfield Hills, Mich., to exclude a shareholder proposal filed by the International Brotherhood of Electrical Workers' Pension Benefit Fund, according to a RiskMetrics Group statement issued on March 7. The SEC's division of corporation finance on Feb. 27 denied a “"no action” request by Pulte to exclude from its proxy statement the proposal, which asks the company to establish a committee of outside directors to ensure non-traditional mortgage loans “are consistent with prudent lending practices,” the statement said.
In all, 22 shareholder proposals addressing risks related to subprime mortgage lending or exposure to non-traditional mortgage investments have been filed this proxy season, according to a RiskMetrics tally. But 18 of the proposals have either been omitted at the SEC or withdrawn by the proponents, the statement said.
Pulte sought to exclude the proposal on “ordinary business” grounds, the statement said. Mark Marymee, Pulte director-corporate communications, and IBEW pension fund officials couldn't be reached for comment.
NEPEAN, Ontario — National Union of Public and General Employees plans use its leverage with a combined C$100 billion (US$101 billion) in affiliated pension assets to challenge what it considers excessive pay of CEOs of Canadian companies in which it invests, according to an NUPGE statement released March 3.
NUPGE is coordinating the effort with affiliated unions that have joint or sole trusteeship of pension funds, including the C$22 billion British Columbia Municipal Pension Plan, Victoria, Larry Brown, NUPGE national secretary-treasurer and the chair of the committee coordinating the activity, said in an interview.
“We will be encouraging our trustees to raise this issue with their plan's investment managers,” Mr. Brown said in a statement. “We would expect them to raise this concern directly with companies where we have a sizable investment. We will also help our trustees develop and sponsor shareholder resolutions calling on companies that our plans are investing in to give investors a vote on the company's executive compensation plan,”
Corporations that pay CEOs excessively will “have a negative effect on the investment return of our pension assets,” Mr. Brown said in the statement.
The 100 top-paid CEOs averaged C$8.53 million in 2006, ranging from $3.06 million to $54 million, the statement said. On average, they are paid more than 218 times the amount of the average Canadian worker, the statement said.
