March 8, 2010
“Pay Disparity” Shareholder Proposals
– Broc Romanek, CompensationStandards.com
As has been the case for the past decade, the topic of executive compensation is dominating the proposals that shareholders have submitted to companies. And as usual, there is quite a variety regarding the focus of these proposals. One “flavor” of the proposals this year is a push by 30 faith-based investors – all of whom belong to the Interfaith Center on Corporate Responsibility – to use compensation as an instrument in the battle for health care reform.
As this press release indicates, at least 21 health industry companies received proposals asking them to publicly disclose the total compensation packages of their top executives, including their health care packages, vis-à-vis that of their lowest paid U.S. workers. According to the release, among the insurers, medical device makers and other companies receiving the resolutions are many of the leading opponents of Congressional action on health care reform.
This new pay-disparity proposal asks for a report covering:
1. A comparison of the total compensation package of our company’s top executives and our lowest paid employees (including health care benefits and costs), in the United States in July 2000, July 2004 and July 2009.
2. An analysis of any changes in the relative size of the gap between the two groups and an analysis and rationale justifying any such trend.
3. An evaluation of whether our top executive compensation packages (including, options, benefits, perks, loans, health care, and retirement agreements) would be considered “excessive” and should be modified to be kept within reasonable boundaries; and
4. An explanation of whether any such comparison of compensation packages (including health care benefits) of our highest and lowest paid workers, invites changes in executive compensation, including health care benefits for departing executives, to more reasonable and justifiable levels, and whether the Board should monitor the results of this comparison in the future-with greater equity as the goal.