Pension funds and proxy-voting advisory firms lined up on different sides on whether to support ratification of the pay of Carol Meyrowitz, executive chairman; Ernie Herrman, CEO and president; and other top executives at TJX Cos. Inc.
The C$278.9 billion ($213.5 billion) Canada Pension Plan Investment Board, Toronto, and $126.6 billion Texas Teacher Retirement System, Austin, plan to vote in favor of the pay packages, while the C$171.4 billion Ontario Teachers' Pension Plan, Toronto, intends to vote against the compensation, according to their proxy disclosures.
Institutional Shareholder Services recommends its asset owner clients support the pay, while Glass Lewis recommends opposing the pay.
Ms. Meyrowitz was paid $19.5 million in TJX's latest fiscal year, ended Jan. 30, down 32% from the previous fiscal year. In January, TJX moved to separate the chairman and CEO positions. Ms. Meyrowitz was named executive chairman and replaced as CEO by Mr. Herrman, who retained his position as president. His pay in the latest fiscal year was $20.1 million, up 43% from the previous fiscal year. The pay of the other three named executives ranged from $4.6 million to $7 million in the latest fiscal year.
OTPP said in its proxy disclosure: “We have concerns over what we believe is a disconnect between pay and performance at the company. Our concerns are compounded by the decision to award significant one-time payment to the executive chairman, without what we believe is sufficient justification.”
ISS in its report supports the compensation packages, noting: “CEO pay declined by 32% … driven by a nearly 40% decline in equity incentive pay, as well as a 70% decline in pension value compared to (the previous fiscal year). The company outperformed its … peers and the S&P 500 index on a one-, three- and five-year basis.”
Glass Lewis gives the company a “D” grade in executive compensation, noting it “has been deficient in linking executive pay to corporate performance.”
A proposal filed by the $2 million defined benefit fund of NorthStar Asset Management Inc., Boston, calls for inclusion of metrics regarding diversity among TJX senior executives in performance measures used to determine CEO compensation.
The three pension funds and both proxy-voting advisory firms oppose the proposal. Under it, diversity metrics include gender, race and ethnicity.
TJX's annual meeting is June 7 in Denver.