Chesapeake Energy is the latest company to face an investor protest over compensation this proxy season. A shareholder proposal seeking an annual advisory vote on executive pay received 56 percent support (based on “for” and “against” votes) at the firm’s June 11 annual meeting. The resolution was filed by the Nathan Cummings Foundation.
The vote at the Oklahoma-based oil company is the 12th majority result this season for a shareholder “say on pay” proposal at a U.S. company, according to ISS data. Other recent majority votes include 52 percent support at Target and 53.9 percent approval at TJX Cos.
In addition, Chesapeake investors gave 55.6 percent support to a novel resolution submitted by investor Gerald Armstrong that requested an annual vote on the compensation received by executives and directors. Chesapeake allows each non-executive director to have up to 40 hours of personal use of the company’s fractionally owned aircraft each year, a perk worth about $100,000 per director.
Chesapeake investors also withheld support from the three directors up for election this year. Two compensation committee members had 40.1 percent opposition, while a third director had 36.7 percent dissent. The company has failed to act upon two majority-supported shareholder proposals in 2009 to declassify the board and to adopt a majority voting standard for uncontested elections.
Two other pay-related investor proposals were on the ballot. There was 36.7 percent support for a first-year resolution filed by the Amalgamated Bank and Connecticut's pension system to bar executives and directors from engaging in derivative or speculative transactions involving company stock. A proposal from the city of Philadelphia's employee pension fund to strengthen the links between cash bonuses and long-term performance received 26.1 percent support.