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Incensed shareholders and lawsuits triggered by failed say on pay votes aren't the half of it. Just wait until the expected M&A wave unleashes 'say on golden parachute' litigation.
June 1 -
Investors in Sterling Bancorp in New York voted against the compensation package of CEO Louis Cappelli and other executives. In contrast, shareholders supported pay at Sandy Spring Bancorp and Orrstown Financial earlier this week.
May 4
Several community banks gave shareholders a bigger voice in the say-on-pay debate this year.
The Dodd-Frank Act requires companies to put their pay practices to a shareholder vote every three years. At least three banks used their annual meetings to let shareholders decide if they wanted to vote more frequently on compensation.
It seems to be
Ameris Bancorp, BankUnited and BancFirst gave shareholders three options: annual say on pay votes, tallying votes every other year, or sticking with a three-year default. The results were interesting.
Ameris (ABCB), a $3 billion-asset company in Moultrie, Ga., was the only one of the three where shareholders wanted annual voting. Two thirds of the votes cast supported annual say-on-pay votes. In comparison, about 30% wanted the nonbinding votes every three years, and a mere 1% were on board with every other year.
BancFirst (BANF) in Oklahoma City disclosed in a regulatory filing Thursday that it will hold advisory votes on executive compensation every three years, in accordance with the will of its shareholders. A year earlier, shareholders of the $5.7 billion-asset company supported holding the advisory vote every three years.
BankUnited (BKU), which is based in Miami Lakes, Fla., disclosed that 71% of its shareholders supported advisory votes every three years, compared to 29% in favor of annual votes and negligible backing for the two-year plan. The $12.2 billion-asset company, which found new lift after private equity bought a failed thrift in 2009, had an initial public offering early last year.
It will be interesting next year to see if other banks decide to give shareholders a similar say on the frequency of advisory votes. What do you think about allowing investors to determine the intervals for say-on-pay voting?
