DuPont shareholders reject say on pay
WILMINGTON, Del. — DuPont Co. shareholders on Wednesday narrowly rejected a proposal to give investors in the chemical manufacturing company a nonbinding vote each year on executive pay.
The proposal called for DuPont’s board of directors to adopt a policy allowing shareholders the opportunity at each annual meeting to vote on a resolution to ratify the compensation of named executive officers.
The “say on pay” proposal, which was opposed by the company, was defeated at Wednesday’s annual meeting, with 53 percent of the votes cast against it and 46 percent in favor.
“We very much agree that shareholders should have a very meaningful voice in compensation,” said DuPont Chairman Chad Holliday, adding that the company nevertheless disagreed with the proposal. Holliday retired as CEO in January.
“We are always open to hear your comments,” Holliday said after the preliminary vote total was announced. “We will certainly listen, and our compensation committee will certainly take that into account.”
According an Associated Press analysis of DuPont’s regulatory filings, Holliday received compensation valued at more than $10 million last year, including a salary of about $1.37 million, performance-based bonuses of $1.7 million, and stock shares and options with an estimated value of almost $7 million when they were granted.
Ellen Kullman, who became DuPont president in October and took over as CEO in January, received total compensation last year valued at $3.37 million.
In its official response to the shareholder proposal on executive pay, DuPont’s board said the proposed advisory vote could place the company at a competitive disadvantage in attracting and retaining executives. The board also said adopting an advisory vote could be premature and lead to conflicting obligations because lawmakers are considering action on the issue.
While the voting percentage in favor of the proposal on executive pay was only slightly higher than the vote at last year’s DuPont shareholders meeting, the idea is beginning to take root in the corporate world.
Shareholders of Pfizer Inc. tentatively approved a proposal last week asking the company’s board to give them an advisory vote on executive compensation, and Apple Inc. said earlier this week that a “say on pay” proposal at its recent shareholder meeting had received a favorable vote.
Meanwhile, shareholders of Verizon Communications Inc. will vote next week on whether CEO Ivan Seidenberg’s $20.2 million compensation package for 2008 was reasonable. The company introduced a nonbinding “say on pay” provision after a proposal to institute a similar provision won a slim majority of votes at its 2007 annual meeting.
In other action Wednesday, DuPont shareholders elected a slate of 13 directors, including newcomer Samuel Bodman, former U.S. energy secretary.
Bodman, 70, served as deputy treasury secretary and deputy commerce secretary under President George W. Bush before being appointed to serve as energy secretary during Bush’s second term.
Wednesday’s meeting marked the first as CEO for Kullman, who Holliday said has shown strong leadership “in this very trying time.”
While noting the difficult economy, Kullman reiterated DuPont’s commitment to increase sales and earnings while redoubling efforts to reduce costs and capital expenditures.
“We’re changing the way we work while understanding what the opportunities are in this very different landscape… Overall, our company is strong, and we’re focused on what we have to do to stay strong in the current environment,” she said.
While DuPont is striving to reduce costs, Kullman said the company would not forsake research and development.
“We discovered Neoprene and nylon during the Great Depression,” she noted.
Wednesday’s annual meeting was the shortest and most low-key in recent memory for DuPont, lasting barely 45 minutes, and no protesters were seen outside the hotel. In recent years, DuPont’s annual meetings have drawn protests on issues ranging from pensions and retiree health care benefits to the company’s environmental record.
DuPont shares closed up 51 cents, or 1.9 percent, at $28.02 Wednesday.
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