After shareholders voted to change the frequency of executive compensation votes to once every year from once every three years, 146 companies in the Russell 3000 adopted the change, said a news release from investment consulting firm Segal Marco Advisors, which has coordinated a say-on-pay investor working group promoting more frequent votes.
The investor group includes the office of Thomas P. DiNapoli, New York state comptroller and sole trustee of the $192 billion New York State Common Retirement Fund, Albany, and the office of Denise L. Nappier, Connecticut state treasurer and principal fiduciary of the $32.4 billion Connecticut Retirement Plans & Trust Fund, Hartford, among other institutional investors.
The investor working group had found that 319 Russell 3000 firms conducted say-on-pay votes on only a triennial basis, prompting the group to urge those companies' boards of directors to endorse executive compensation votes on an annual basis, during 2017, when most companies hold shareholder votes on how frequently they wish to vote on say-on-pay, according to the news release.
Of the 319 firms contacted, 146 switched to an annual frequency, while 127 remained triennial. The remaining 46 companies did not have a say-on-pay frequency vote.
In the news release, the group took the opportunity of the announcement to criticize the Financial CHOICE Act, the Dodd-Frank replacement bill passed by the U.S. House of Representatives in June that imposes tighter restrictions on shareholder processes for submitting corporate proposals and voting for corporate board directors.
"The Financial CHOICE Act seeks to gut investors' rights and reduce corporate accountability on a host of issues, including bloated executive pay," Mr. DiNapoli said in the news release. "Limiting shareholders' right to vote on compensation sends a dangerous message to corporate executives that there are no consequences for excessive risk-taking or poor performance."
The bill has yet to pass the Senate.