We've just about come to the end of the 2011 proxy season, the first to feature widespread “say-on-pay” votes. While the vast majority of compensation plans have been approved, remember the old proverb that failure teaches more than success. So what can we learn from the 21 companies (as of mid-May; the numbers have been rising since) that had a majority of shareowners cast “no” votes on executive compensation plans?
To begin, performance matters. In 2010, the Standard & Poor's 500 returned 12.8 percent (excluding dividends). Yet, companies that tripped over the say-on-pay hurdle returned an average of -4.7 percent, ...