Blockbuster Gives Shareholders Voice: Approves Say or Pay
Last spring, shareholders at Blockbuster took advantage of proxy season to vote their thoughts on issues of executive salaries. By a slim majority, 57%, they became the first of many companies to pass a “say on pay” shareholder proposal. (Verizon shareholders passed a similar resolution a few days later). Tuesday, Blockbuster became the first major media company to accept the non-binding proposal at the board level.
The “say or pay” concept, which was initially suggested to Blockbuster by the New York City Employees’ Retirement System, calls for an annual shareholder vote (pro or con, yay or nay) on executive pay. It is not binding, and a compensation committee has no obligation to agree, but it does insure the shareholders have a voice in the process.
Blockbuster will begin holding the vote at their 2009 annual meeting.
In a statement, Blockbuster’s CEO Jim Keyes said the decision "reinforces our commitment to implementing strong corporate governance practices and improving transparency with our shareholders."
The decision will also help quell any lingering concerns (if there are any) left from a compensation struggle that led to the departure of previous CEO John Antioco. (Several years ago board member Carl Icahn tried to oust Antioco and last year, Antioco left after battling over a bonus payout).
In addition to Blockbuster, other companies are also considering "say or pay" proposals. In March, Apple shareholders approved a similar non-binding resolution that asks the company’s board of directors to accept their input on what Apple’s executives are paid. That proposal was initially requested by the AFL-CIO Reserve Fund a year earlier but failed to get enough support.
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