BOSTON, MA March 10, 2008 — Boston Common Asset Management commends Aflac for officially becoming the first U.S. company to give shareholders a “say-on-pay” in its 2008 proxy released Friday. Aflac’s decision to adopt an advisory vote on executive compensation, commonly referred to as say-on-pay, evolved from an open and constructive dialogue led by Boston Common beginning in 2006.
The advisory vote is a management-sponsored proposal presented in the annual proxy statement, which allows shareowners to cast non-binding ‘yes’ or ‘no’ votes on the company’s executive compensation report.
“The company has consistently demonstrated its leadership in listening to shareowner opinions on executive pay by first adopting the vote, then moving up its implementation to 2008, and now providing a clear model on how to accomplish it,” said Dawn Wolfe, social research and advocacy analyst at Boston Common.
“While other companies continue to concentrate on how say-on-pay could potentially erode Board power and the obstacles of implementation, Aflac has answered those hard questions for its shareowners and moved forward. They should be commended for articulating a clear and concise presentation of the advisory vote and for their leadership in becoming the first U.S. company to enhance board accountability in this way,” Wolfe continued.
Given an overall concern with the decoupling of pay from performance and the widening gap between CEO compensation and that of the average U.S. worker, Boston Common continues advocating for say-on-pay reform at other companies in its clients’ portfolios.
Boston Common is the lead proponent of say-on-pay proposals currently pending at IBM and Waddell & Reed Financial, which are scheduled to go to a vote later this year.
To date, 95 say-on-pay proposals have been filed for the 2008 proxy season by a diverse network of over 70 institutional and individual investors. Eight companies received a majority vote in favor of the proposal last year, including Verizon, Motorola, Blockbuster, Ingersoll-Rand, Clear Channel, Activision, Par Pharmaceuticals, and Valero Energy.
The first proposal to go to a vote in 2008 received majority support at Apple Computer on March 4th. Current commitments to implement the vote are from Aflac, Verizon, Par Pharmaceutical, and RiskMetrics Group.