It took six months from when shareholders
asked for it, but
Pfizer 's (NYSE: PFE) board has finally given
shareholders a voice on executive compensation.
Well, an
advisoryvote, anyway, which is slightly better than
nothing, I guess. Shareholders' first vote will be at the
annual meeting next year -- sorry, you'll have to wait
another six months to act. And then they'll get to vote every
year after that.
Unlike some fellow Fools --
hereand
here-- I'm not convinced that say on pay is worth the
effort. While companies including
Blockbuster (NYSE: BBI),
Verizon (NYSE: VZ), and
Aflac (NYSE: AFL) have instituted shareholder
advisory votes, many shareholders have the same kind of
apathy for the process that I have. Shareholders of
Johnson & Johnson (NYSE: JNJ) and
Abbott Labs (NYSE: ABT) both voted down
proposals at their annual meeting this year, and Pfizer's
proposal passed by the slimmest of margins.
Here's my take: If you don't like the fact that Pfizer
gave its chief financial officer a $1.2 billion bonus for
getting the Wyeth merger completed while cutting about 20,000
lower-level positions, sell your shares, 'cause that's
pretty scary. Some will say that you could try to work
from the inside to change things, but I think there are too
many potential investments to bother. Most people -- Carl
Icahn excluded -- wouldn't buy shares in a poorly run company
and then try to turn it around. Why is changing executive pay
any different?
And I'm not sure how easy it would be to change
even if you wanted to. As
Whole Foods ' (Nasdaq: WFMI) CEO John Mackey
pointed outin Motley Fool Conversations, the problem is
that companies hire compensation consultants to find out what
other executives are making, and then boards want their
executives in the top 25% because otherwise it's like saying
you have inferior management. As everyone tries to move their
executives near the top, there's an inflationary pressure
that moves the price up.
I guess the secret to finding good companies with
lower-paid executives is to find companies and executives who
don't care as much about that part of their status. There are
some out there -- Mackey is paid just $1 a year. Please share
others that you know and love in the comments box below.
This article was originally published as
Pfizer Pfires Up Say on Payon
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