The Advisors' Blog

This blog features wisdom from respected compensation consultants and lawyers

November 4, 2019

More on “CalPERS’ Say-on-Pay Policy: No More Second Chances?”

Liz Dunshee

Last spring, I blogged that CalPERS was considering a change to its proxy voting guidelines that would result in it voting “against” compensation committee members in the same year that it votes against say-on-pay or compensation plans. Its recently updated Proxy Voting Guidelines confirm that policy – and as Broc has blogged, the pension fund voted against 53% of say-on-pay proposals last year! So that could translate into a lot of “no” votes for directors in the coming season.

This Proxy Insight memo (pg. 7) points out that CalPERS isn’t even close to being the most “aggressive” public pension fund out there when it comes to say-on-pay votes. The Minnesota State Board of Investment voted against 69% of say-on-pay proposals in the Russell 3000, followed by the Florida State Board of Administration – which voted against 64% of proposals – and Calvert Research & Management – which voted against 57%. This MSCI blog points out that negative votes are becoming more common among other pension funds too.

Conversely, the opposite end of the spectrum is dominated by fund houses, including giants like BlackRock, Vanguard and State Street – who supported 97%, 94% and 89% of say-on-pay proposals. Proxy Insight notes that while there are exceptions in both directions, it seems that pension funds are the ones most likely to take a hard line.