Say On Pay - Examples of Shareholder Revolts

Examples of Shareholder Revolts

Incidents at large UK companies in which shareholders have "revolted" against the size of pay awards given to board members, since the "say on pay" legislation was introduced.

• Vodafone shareholders voted 10% against, and 30% in abstention from £13m in shares for CEO Sir Chris Gent. (July 2001)
• Royal & Sun Alliance shareholders voted 28% against a £250,000 retention bonus for CFO Julian Hance and £1.44m severance pay for CEO Bob Mendelsohn. The share price had just dropped. (May 2003)
• GlaxoSmithKline shareholders voted 50.72% (advisorily) against a £22m bonus salary and stock severance package for CEO Jean-Pierre Garnier. Chairman Sir Christopher Hogg said it was just the difference in culture to the US that was holding Britain back and they should accept it. The TUC had been lobbying pension funds. (May 2003)
• ITV shareholders were 40% against a £15m (£1.8m cash, rest shares) payoff to Chairman Michael Green. It was justified on the basis that he would have taken legal action were it not paid, because he was removed prior to the Carlton/Granada merger.
• Berkley Managing Director and founder of the property company had 47% of shareholders vote against his £1.2m (out of a total £4.7m package) under a long term incentive scheme that he had not actually belonged to. (August 2003)
• Unilever Former chairman Niall Fitzgerald got £1.2m after profits fell. (April 2005)
• Tesco shareholders voted 15% against an £11.5m bonus on Sir Terry Leahy’s salary as CEO. It was linked to the success of the firm's Fresh & Easy chain in the US. The Association of British Insurers and PIRC were against. (June 2007)

In the first year of mandatory shareholder advisory "say on pay" voting in the US, 37 Russell 3000 companies failed to receive majority support from shareholders. In the second year of voting, 44 Russell 3000 companies have failed as of June 12, 2012. Companies include:

• Nabors Industries shareholders voted against "say on pay" in both 2011 and 2012 (75% opposition in 2012) given concerns over the company's high CEO pay and severance payments. Shareholders also voted against the company's new incentive bonus plan and long-term incentive plan in 2012.
• Hewlett Packard failed a "say on pay" vote in 2011 in light of new CEO Léo Apotheker's employment agreement and the company's stock performance.
• Citigroup failed "say on pay" with 55% opposition in 2012 after giving CEO Vikram Pandit three retention grants valued at $27.9 million.