What can I do?
VOTE YOUR PROXY: If you own shares directly, take the time to consider how to vote on advisory resolutions on compensation. Some institutional investors release information about their voting decision, which might provide insight.
Never voted your proxy before? Learn more about the Power of the Proxy.
HOLD YOUR MONEY MANAGER AND MUTUAL FUND ACCOUNTABLE: Find out how your shares are voted.
The AFL-CIO has graded some mutual funds on their voting practices. Learn more at the AFL-CIO Executive Paywatch website.
You may also consider contacting your funds. Phone calls may be frustrating when you reach someone who is unfamiliar with your request, but you can cite the SEC requirements below. Enough calls may encourage greater accountability.
Mutual funds and other registered management investment companies that invest in voting securities are required to disclose the policies and procedures that they use to determine how to vote proxies relating to securities held in their portfolios.
You can request a description of a mutual fund’s proxy voting policies and procedures directly from the fund by calling a toll-free (or collect) telephone number listed in its semi-annual and annual reports to shareholders. The fund must then send you the information, without charge, within three business days of receipt of your request.
– Security and Exchange Commission’s Mutual Fund Proxy Voting Records and Policies
In the coming months As You Sow will be providing additional information.
ENCOURAGE THE DEVELOPMENT OF RIGOROUS GUIDELINES: If your retirement savings are held through a pension fund (TIAA CREF, CalPERS, or others) find out how active that fund is. Do they have thoughtful voting guidelines, ones that don’t simply focus on arcane details, but understand the critical issues that continue to inflate pay? Are they active in the Council of Institutional Investors and other groups that coordinate shareholder voices on corporate governance issues?
COMMENT AT THE SEC: There are compensation provisions of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act that remain to be implemented. As noted in our Executive Compensation FAQs, there have been some draft rules issued, and others are anticipated within the year. Many companies object to any additional requests for disclosure, and pay high-priced lawyers to present arguments against them. Average shareholders must take the time to counter their arguments. On 953b – the pay ratio proposal – this has already happened: the SEC has received over SEC received over 128,000 public comment letters. While some were form letters, over 1,000 were unique letters, sent in by citizens like you. Stay tuned for more info when more draft rules are released.
Visit sec.gov to see letters that others have filed, and stay tuned for more info when more draft rules are released.
CONTACT YOUR CONGRESSPERSON: Ask your Representative to co-sponsor HR 3970. Ask your Senator to co-sponsor S1476. Both of these measures are designed to plug the “performance” loophole that provide taxpayer subsidies for companies that pay executives more than $1 million. Congress already declared such excessive compensation as an illegitimate business expense.
FILE A SHAREHOLDER RESOLUTION: If you have directly owned more than $2,000 worth of stock in a particular company for more than a year, you are qualified to file a shareholder resolution. If it meets certain requirements, the company must include it on the proxy statement and allow shareholders to vote on it. You can also co-file on a resolution being brought by As You Sow or another advocate.
Compensation proposals that received the highest level of support in 2014 were those that called on companies to prohibit accelerated vesting of performance shares in the event of a change in control. Four of these proposals were supported by more than 50% of votes cast this year.
