Exec pay still top of investor concerns in 2013 Global Proxy Review

Union affiliated funds outline rationale for votes at biggest companies in annual report on proxy strategy.

Levels of corporate executive remuneration at globally renowned companies remain one of the proxy voting pre-occupations of some of the biggest active pension fund investors organising under the banner of The Committee on Workers’ Capital (CWC), a group of funds affiliated to 200 labour union organizations from 25 different countries.
In its latest Global Proxy Review guide to key shareholder votes in 2013, the CWC, which was joined this year by the giant ZAR1.2trn (€101bn) Government Employees Pension Fund of South Africa, and also includes pension scheme members of the influential Australian Council of Super Investors (Australia), said its members were asked to put forward the most important voting themes they had looked at in the last year at high-profile companies. Executive remuneration came out top at 30% in the number of key ESG votes selected by funds for the report, followed by director election at 17.5% and discharge of board directors and executives from liability at 12.5%. CWC’s third Global Proxy Review covers forty votes at company annual general meetings (AGMs) in the first three quarters of 2013 in eight countries. They include votes held at Wal-Mart, News Corporation, Barrick Gold, Heineken, Standard Bank, Telefonicà, UBS and Glencore-Xstrata.The report gives a detailed summary of each key vote, the project partners for the vote and important information about the context of votes. It includes a trustee checklist that can be used when communicating with proxy voting services and fund managers. A dedicated free website allows investors to search for key votes at companies and look back at their proxy history. The CWC said that of the countries included in the report, ’say-on-pay’ votes are required in the Netherlands and the UK where the result is binding, and in Spain, the USA and South Africa, where the result is advisory. Australian ’say-on-pay’ votes are partially binding, and the result may trigger special board elections. In Switzerland, binding ’say-on-pay’ votes to be held on an annual basis will become mandatory in 2015 at the latest, following the approval of an initiative by Swiss voters. Advisory ’say-on-pay’ votes are increasingly held voluntarily in Canada. Other members of the CWC include the Shareholder Association for Research and Education (Canada); Eumedion (Netherlands); the Confederación Sindical de Comisiones Obreras and the Union General de Trabajadores de España (Spain); ETHOS Foundation (Switzerland); The Trades Union Congress and Pensions Investment Research Consultants Ltd (UK); and the American Federation of Labour and Congress of Industrial Organizations (US).