Shareholders at Sterling Bancorp (STL) rejected the New York company's executive compensation plan Thursday, adding to a small but growing list of banks that have faced such opposition.
Closely watched say-on-pay votes passed at two other community banks this week — Sandy Spring Bancorp (SASR) and Orrstown Financial Services (ORRF) — despite recommendations by an outside firm to reject the companies' executive pay plans.
Sterling disclosed in a regulatory filing Friday that only 40% of voting shares backed the compensation packages for Louis Cappelli, the $2.5 billion-asset company's chairman and CEO, and other top executives.
Proxy advisory firms Glass Lewis and Institutional Shareholder Services had recommended rejecting compensation at Sterling. Last year, say on pay passed at Sterling with about 84.8% of votes cast.
Shareholders have also rejected executive compensation at Citigroup (NYSE: C) and FirstMerit (FMER). The votes are nonbinding.
ISS had also recommended that shareholders reject compensation plans at Sandy Spring and Orrstown.
About 72.8% of voting shares at Sandy Spring approved executive pay at the $3.7 billion-asset institution in Olney, Md. At Orrstown, in Shippensburg, Pa., about 71.5% of shareholders approved pay at the $1.4 billion-asset institution.
The percentages voting in favor of compensation packages were smaller than last year's results at both companies. Last year, about 81% of votes cast supported compensation at Sandy Spring last year; about 89% of Orrstown's voting shares backed pay packages.
Glass Lewis has said that a say-on-pay approval of less than 75% is a cause for concern, while ISS says that 70% or less is concerning.