Research firm Proxy Insight published a report Wednesday, May 28th, suggesting that the level of shareholder opposition to executive compensation at large global banks is reaching highs not seen since early 2012.
Nick Dawson of Proxy Research noted in the report that the most recent batch of “say on pay” votes at the annual meetings of the 20 largest global banks saw shareholders voting against bankers pay packages in increasing numbers.
2014 versus 2013
According to the data in the report, an average 13.1% of shareholders voted against management compensation packages this year. That surprisingly high percentage is the same as was seen in 2012, and a significant increase compared to the 8.4% who voted against bankers pay deals in 2013.
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Furthermore, a number of well-known financial institutions including Barclays PLC (ADR) (NYSE:BCS) (LON:BARC), JPMorgan Chase & Co. (NYSE:JPM) and Standard Chartered PLC (LON:STAN) all received votes against exec pay representing more than 20% of their shareholders.
Shareholder opposition more widespread today
It should also be noted that opposition to bankers pay is significantly more widespread today than a couple of years ago, with votes against high bankers pay representing more than 10% of shareholders at ten banks. Only five of the same 20 banks received votes against exec pay of 10% or more in 2012.
Many institutions opposed bankers pay deals
Proxy Insight also dug into the the pay-related votes of major institutional investors at each bank over the last 12 months in order to assess the level of opposition from long-term investors. The results showed that Domini, Trillium and Green Century voted against management on every single remuneration vote, as did Proxy Voting Advisor PIRC, which isa major thought leader for local pension funds. Furthermore, public pension funds such as PGGM, British Columbia and APG frequently opposed banker pay packages..
Last but not least, Dawson also points out quite a few mutual fund managers were also opposing bank exec pay. “However, perhaps more significant is that a number of traditional asset managers such as Aviva, Threadneedle and Fidelity opposed at least half the remuneration resolutions where they voted.”