Wonder why the Financial Times seems to do a consistently better job of reporting on topics that are inconvenient to American executives, like institutional investors taking serious steps to rein in their compensation, that the US media outlets covering the same beat, like the Wall Street Journal, the New York Times, and Bloomberg?
This story in today’s FT, “Blue chips in talks on UK-style pay vote,” appears, at least at this hour, to have no counterpart in the logical suspect media venues. And it shows the seriousness and commitment of major investors to have more influence over corporate governance:
US companies, including Pfizer, the drugmaker, and American International Group, the insurer, are seeking to avoid shareholder revolts by meeting leading investors to discuss holding UK-style votes on executive pay.
The move underlines the growing influence of US pension funds on corporate governance, following the outcry over executive pay at companies such as Pfizer and Home Depot, the retailer.
It also reflects some companies’ desire to avoid public stand-offs with investors, which have become more frequent since recent governance scandals.
The talks, which follow a campaign by US and international pension funds to demand a greater say on executive pay, could pave the way for regulatory changes to introduce a non-binding annual shareholder vote.
AIG, Pfizer and rival Schering-Plough confirmed they and other companies had agreed to talks in a “working group” with pension funds including the $220bn California Public Employees’ Retirement System and the American Federation of State, County and Municipal Employees, the biggest public workers’ union.
AIG, Pfizer and Schering-Plough were among 44 companies targeted by an investor coalition that last month filed motions demanding a UK-style vote on pay – a move that turned executive pay into a battleground for the coming season of shareholder meetings….
The working group, which will hear from academic and corporate governance experts, is expected to meet for the first time on Friday. Other companies believed to be part of the discussions include the consumer group Colgate-Palmolive, the drugmaker Bristol Myers-Squibb and the conglomerate Tyco. They either declined to comment or were unavailable.
People close to the talks said that all participants agreed that the proposal of a non-binding vote on compensation, which has been in force in the UK since 2003, had merit but needed to be adapted to the US legal and regulatory framework….