CEO Pay: Should Shareholders Have More Say?
Corporate governance watchdog Nell Minow thinks reform is long overdue.

Nell Minow is co-founder of The Corporate Library, a research firm that advocates corporate governance reform. On March 8 she endorsed legislation on Capitol Hill that would require companies to let shareholders cast nonbinding votes on CEO pay. With proxy season about to begin, I spoke with Minow about what she sees on the horizon. Here are excerpts from our conversation.
KIPLINGER'S: Shareholders seem pretty steamed this proxy season about executive pay.
MINOW: I think we're at the high water market for pay insanity. Last year, Home Depot and Pfizer awarded insane, disgusting departure packages for failed CEOs. On the other hand, in both cases, the boards tied for the "most improved player" award in designing more moderate pay packages for new CEOs.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Where is the fight headed from here? Right now, only certain portions of executive pay can be put to a shareholder vote, mostly having to do with the stock option plan. But there's a movement to give shareholders an advisory vote on the whole CEO pay package. It wouldn't be binding, but companies would still have to put in the proxy, here's our pay plan, what do you think? It would make companies more willing to communicate with shareholders and less willing put outrageous pay plans to a vote. This is done in the United Kingdom. There's only been one instance there of a majority vote against the pay plan, and in that case, GlaxoSmithKline substantially revised the plan after the shareholder vote. Aflac, the giant insurance company, agreed to be the first U.S. company to voluntarily put their pay plan up to an advisory vote this year -- needless to say, it's a pretty good plan.
What are some of the other shareholder concerns? The number one issue again this year is whether directors should be required to win a majority vote of the shareholders. It's a very simple idea. Now, under current laws, if a director gets one vote -- even if he casts it for himself -- he gets elected, even if 99% of shareholders vote against him. Shareholders have been asking companies to adopt a majority vote, so that if someone doesn't get that vote in support, he or she is not allowed to serve. Over 300 companies already have adopted this policy, and there are a lot more majority vote proposals this year. With or without a majority vote proposal, shareholders should vote "no" on directors who are doing a bad job -- starting with the ones on the compensation committees if need be.
Shareholders were supposed to get more access to company proxies to put their own board candidates forward. Has that happened? I support access -- it's the second-most prominent issue we're working on. But it stands in an unusual place right now. The Second Circuit Court of Appeals decided a case in favor of shareholders, but new rules from the Securities and Exchange Commission were expected to cut that back. The SEC hasn't yet, so we're in a bit of an interstitial moment. As a result, there are a number of shareholder proposals out there this season requesting access.
What's the next big issue? Climate change is very important, and I think it's going to be even more important going forward. I see a lot of calls to boards to create committees to address climate change. You can separate companies dealing with this issue into the Good, the Bad and the Ugly. The good ones see a lot of potential to create goods and services that respond to the increasing need for green products. The bad ones aren't thinking along those lines, but at least are thinking of ways to make their own operations greener. The ugly aren't doing either one. Climate change is where cutting ties to South Africa or tobacco was several years ago. They began as feel-good issues but became bottom-line, financial issues.
Should mutual fund investors be concerned about how proxies are voted by the funds they invest in? We just published a new report. Mutual funds are doing an even worse job than previously on proxy votes. They're supporting outrageous pay packages and seem generally unwilling to support shareholder resolutions about pay. And within some organizations, different fund managers are canceling each other out. The value fund manager supports a different view about executive compensation than the growth fund manager. Crazy!
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Anne Kates Smith brings Wall Street to Main Street, with decades of experience covering investments and personal finance for real people trying to navigate fast-changing markets, preserve financial security or plan for the future. She oversees the magazine's investing coverage, authors Kiplinger’s biannual stock-market outlooks and writes the "Your Mind and Your Money" column, a take on behavioral finance and how investors can get out of their own way. Smith began her journalism career as a writer and columnist for USA Today. Prior to joining Kiplinger, she was a senior editor at U.S. News & World Report and a contributing columnist for TheStreet. Smith is a graduate of St. John's College in Annapolis, Md., the third-oldest college in America.
-
Standard Deduction 2026 Amounts Are Here
Tax Breaks What is the standard deduction for your filing status in 2026?
-
New 2026 Income Tax Brackets Are Set: What to Know Now
Income Tax The IRS has adjusted federal income tax bracket ranges for the 2026 tax year to account for inflation. Here's what you need to know.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have Today
Bank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have Today
ORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
How to Invest for Rising Data Integrity Risk
Amid a broad assault on venerable institutions, President Trump has targeted agencies responsible for data critical to markets. How should investors respond?
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have Today
Sherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
If You'd Put $1,000 Into UnitedHealth Group Stock 20 Years Ago, Here's What You'd Have Today
UNH stock was a massive market beater for ages — until it wasn't.
-
What Tariffs Mean for Your Sector Exposure
New, higher and changing tariffs will ripple through the economy and into share prices for many quarters to come.
-
How to Invest for Fall Rate Cuts by the Fed
The probability the Fed cuts interest rates by 25 basis points in October is now greater than 90%.
-
Are Buffett and Berkshire About to Bail on Kraft Heinz Stock?
Warren Buffett and Berkshire Hathaway own a lot of Kraft Heinz stock, so what happens when they decide to sell KHC?