The Advisors' Blog

Last week, NYC Comptroller Brad Lander and New York State Comptroller Thomas DiNapoli announced that they were launching a “vote no” campaign against the re-election of Amazon’s directors responsible for human capital management. Here is their letter to shareholders (filed with the SEC as a notice of exempt solicitation) – they’ve also set up a website devoted to the campaign. Their director complaints include:

– Despite repeated requests, the Committee has not met with institutional investors to discuss possible improvements to its human capital management oversight and disclosure

– The Committee has not adequately overseen health and safety, with adverse consequences for Amazon and its employees

– Amazon’s labor practices, repeatedly investigated by regulators, have been found to violate state and federal law and also conflict with Amazon’s own human rights policy

– Unusually high employee turnover relative to peer companies has some Amazon executives worried about running out of hirable employees in the U.S.

This vote no campaign comes at the same time that Carl Icahn has launched actual proxy contests at Kroger and McDonald’s that he says are related in part to the mismatch in executive versus employee pay. From his “open letter” to McDonald’s shareholders:

Perhaps if the Company’s executives applied the same effort to getting their suppliers to become completely gestation crate-free as they do to obtaining rich compensation packages, we would not be having this election contest. I find the Company’s executive compensation, especially relative to the average employee, to be unconscionable. For 2021, total Chief Executive Officer compensation was $20,028,132, an astounding 2,251x the average employee’s total compensation of $8,897. The Board is clearly condoning multiple forms of injustice and I believe the majority of the public would agree.

Other companies should pay attention to these threatening shots across the bow. Compensation committees are being pushed into the spotlight in regards to human capital concerns and income inequality – and the time to act is now, versus waiting for complaints.

To arm yourself – and your board – with the info you’ll need, make sure to register for our upcoming “Proxy Disclosure & Executive Compensation Conferences” – coming up virtually October 12-14. Among other critical topics, our agenda includes sessions on the compensation committee’s evolving role, human capital, and how to protect your board from the next maelstrom.

In addition, join us for the “1st Annual Practical ESG Conference.” As I blogged yesterday, it’s becoming more and more important for compensation committees to get their arms around ESG – in order to consider whether and how to add ESG dimensions to executive and even employee pay programs.

For both of these events (which can be bundled together for a discount), our seasoned and diverse speakers will be sharing practical guidance in a fast-moving format. Sign up online, email sales@ccrcorp.com, or call 1-800-737-1271.

– Liz Dunshee