Treasurer urges ‘say on pay’ for 2010 proxy season
HARTFORD — State Treasurer Denise L. Nappier thinks shareholders of public companies should have a say in executive compensation.
On February 2 Nappier’s office, along with 30 institutional investors, released an open letter to 17 financial companies asking them to adopt so-called say on pay for their shareholders.
Nappier is principal fiduciary of the $22.7 billion Connecticut Retirement Plans & Trust Funds (CRPTF), which earlier this month filed shareholder proposals at 12 major corporations to strengthen executive pay practices. Among the dozen companies are Goldman Sachs, Citigroup and Bank of America, three top financial firms whose pay to company executives has come under scrutiny in the aftermath of the government bailout.
The proposals focus on six areas of executive pay: say on pay, responsible use of company stock, board accountability for pay decisions, severance arrangements, compensation consultant disclosure and linking CEO pay to succession planning.
For more than a decade, Nappier has advocated for transparent and performance-based executive pay as key elements of good corporate governance.
“The current economic crisis underscores what we’ve been saying all along: large paychecks don’t guarantee good performance,” Nappier said in a statement. “It is therefore critical for boards to ensure that management’s interests are aligned with those of shareholders through compensation structures that strongly link pay to both individual and company-wide long term performance.”
The CRPTF is preparing to cast its votes for the 2010 proxy season, taking into consideration those companies that have already adopted Say on Pay as a result of CRPTF’s shareholder resolutions or complied with federal government requirements imposed on financial institutions that received funds under the Troubled Asset Relief Program (TARP). CRPTF’s votes on company proxy ballots can be viewed at state.ct.us/ott.
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