So maybe say on pay wasn't a cruel hoax?

By Cydney Posner 

The author of this article must have read the CooleyAlert that went out yesterday!  The following article from today's WSJ, Pay Starts to Bend to Advisory Votes, reports that say on pay  "is starting to affect how the top brass get paid, even though few companies have lost ‘say-on-pay' votes this year." http://online.wsj.com/article/SB10001424053111903635604576474231868112632.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsThird

According to the article, "[o]verall CEO compensation has yet to come down, but companies are tweaking some elements of pay packages and spending more time promoting compensation plans to institutional investors, signs the year-old law is beginning to increase investor involvement in pay decisions.

"In particular, companies are under pressure to adjust or defend compensation that isn't explicitly tied to performance. General Electric Co. and Lockheed Martin Corp. secured support for executive-pay plans after raising the bar at the 11th hour on stock-option grants already awarded to their chief executives. Pfizer Inc. and Johnson & Johnson squeaked through votes after lobbying institutional shareholders to ignore criticism of their compensation practices.

"Umpqua Holdings Corp. shifted gears after losing a say-on-pay vote in April. Institutional Shareholder Services, which advises large investors how to vote in corporate elections, had recommended a ‘no' vote over Umpqua's decision to boost CEO Raymond P. Davis's compensation even as the Oregon community bank and investment firm's stock performance lagged behind peers. Opponents defeated the pay resolution with 62% of the vote.

"Umpqua board members decided to fix pay practices ‘the day after the say-on-pay vote,' said Steven L. Philpott, the concern's general counsel. In late June, Umpqua put performance conditions on restricted shares and stock options it had awarded its executive officers in January. Mr. Philpott said it marked the first time that Umpqua directors had tied stock grants to total shareholder return, which equal share-price changes plus reinvested dividends."

The article also cites data from Towers Watson showing "that seven of 25 companies that received less than 80% support in say-on-pay votes already have altered compensation programs such as severance and perquisites. The survey of 179 U.S. public companies found another six of the 25 are planning or considering changes ahead of their 2012 annual meetings." The article also notes that companies "whose pay votes squeaked through are reaching out to shareholders as well as to investor adviser ISS, often in hopes of avoiding another thumbs-down from the proxy adviser….ISS expects visits from more leaders of companies that saw defeats or close calls on say-on-pay votes because they fear tough re-election fights next year for compensation committee members, said Patrick McGurn, an executive director at the firm."

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