Fund Votes research shows that SRI firms agree on what is to be done to improve the executive compensation.
Almost without exception, six SRI investment firms (including Domini, Calvert, Citizens, Parnassus, MMI Praxis and Walden) voted exactly alike on shareholder resolutions addressing various aspects of executive compensation in 2008 (blue bars on graph). By comparison, mainstream mutual funds were less unanimous in their voting (red bar graph series).
All SRI funds supported categories of resolutions such as those calling for an advisory vote on executive compensation, performance-based equity compensation, and others. None of the SRI funds supported resolutions calling for recoupment of unearned management bonuses (at Wyeth – MMA Praxis, Motorola – Domini, Calvert and MMA Praxis, and Wal-Mart – MMA Praxis) and a limit or discontinuation of stock option awards, amongst others.
On the one category in which there was disagreement (‘Limit Executive Compensation’), there appears nevertheless to be near-consensus at the level of the individual resolutions. All SRI funds supported the resolutions at AT&T and IBM addressing the calculation of performance-based compensation for executive officers using projected returns on employee pension fund assets.
Of all resolutions addressing executive compensation, there appears to have been general disagreement only on a resolution filed at Bank of America calling for a curb on CEO compensation increase beyond diluted earnings per share growth.
Besides the Bank of America resolution, only two other votes cast by SRI funds contradicted the consensus on executive compensation .
The overall consensus on 2008 executive compensation resolutions (of which there were 154) for the six SRI fund families studied comes out at 98%.