Shareholder support for disclosure of corporate political support continues to build.

The Center for Political Accountability, examining results of disclosure proposals for the 2010 annual meeting season, found that shareholder support for disclosure rose to a record 30.25% at 28 meetings.

Since 2004, about 200 disclosure resolutions have been submitted on corporate proxies.

Disclosure support at four companies was particularly strong: Coventry Healthcare, 46%; Express Scripts, 42%; CVS Caremark, 41.35%; Sprint Nextel, 41.2%, and Allstate, 39.7%.

Bruce Freed, President of the CPA, says the results indicate that “more and more (investors) are calling for an end to the secrecy that has cloaked corporate political spending and want accountability.”

He added: “When you consider that the majority of votes side with management as a matter of course, the substantial support from retail and institutional shareholders shows the broad support for political disclosure.”

The Center recently launched an online database that allows users to examine how specific companies treat political accountability and disclosure.

Corporate political campaign support has become a hot button issue this year, particularly in view of the January 5-4 decision by the U.S. Supreme Court removing limits on corporate and union spending on political ads.

Critics of the decision fear a deluge of corporate spending, prompting Democrats to seek to limit the decision and to require contributors to disclose their identities.  The legislation, labeled the DISCLOSE Act, passed the House 219 to 206 in late June, but backers had to make key concessions to achieve passage.  One change would exempt the National Rifle Association from the bill’s disclosure requirements. And opponents, led by the U.S. Çhamber of Commerce, have labeled the measure an assault on free speech.

Similar legislation introduced in the U.S. Senate faces an uncertain future, particularly in an election year.

Some 55 publicly-held U.S.-based companies have now voluntarily agreed to hold annual advisory shareholder votes on executive compensation, according to shareholder advocates who have been pushing for adoption of the practice.

The number of companies with so-called “say-on-pay” votes has increased from only 6 in 2008, when Aflac Inc. became the first to adopt the practice, and 19 in 2009.

“Say-on-pay holds corporate leaders accountable for unjustifiable CEO pay,” said Gerald W. McEntee, President of the American Federation of State, County and Municipal Employees (AFSCME), a 1.6 million member union whose members participate in public pension funds with combined assets worth more than $1 trillion. “Shareowners are demanding sensible pay for performance programs that discourage excessive risk taking.”

In addition to the 55 companies that have adopted say-on-pay votes, companies participating in the federal government’s Troubled Asset Relief Program (TARP) are also required to have annual advisory votes.

More companies are “stating a higher comfort level with the concept” and there are “several companies whose boards have voted to adopt but have not gone public as yet,” said Timothy Smith, senior vice president of Walden Asset Management and a leader in the say-on-pay movement.  Shareholder proposals urging the adoption of annual say-on-pay votes have been filed at 70 companies in 2010, according to Smith.

Votes Are Advisory

The say-on-procedures voluntarily adopted by companies to date generally establish mechanisms that enable shareholders to annually register their approval or disapproval of compensation for senior management.  In most cases, said Smith, the advisory vote is likely to result in “pro-forma” approval of executive pay packages.  However, if shareholders consider compensation excessive, especially when combined with poor corporate performance, investors could vote to register disapproval.

“It puts the (board’s) compensation committee on notice,” Smith said.  “”A stubborn company could ignore it entirely, but I don’t think they would.”  Smith noted that a majority of shareholders at Royal Dutch Shell last year voted disapproval of management pay, prompting revisions of pay packages.  Advisory shareholder votes on executive compensation are mandated in the United Kingdom.

The coalition pressing for say-on-pay reform includes a number of public pension funds, labor funds, asset managers, individual investors, foundations and religious investors.  Denise L. Nappier, Treasurer for the state of Connecticut, said: “Corporate boards have a primary responsibility to their shareholders – and this includes getting input from them on how well the company’s executive compensation ties pay to performance.  These 50 and counting companies deserve credit for listening to their shareowners.”

Smith said a number of financial firms are among the companies recently announcing they adopted a say-on-pay vote, including American Express, Bank of New York Mellon, Goldman Sachs, JPMorgan Chase, State Street, SunTrust Banks and Wells Fargo. Other adopting companies, according to Smith, include Aflac, Ameriprise, Apple, Bristol-Myers Squibb, CVS Caremark, ConocoPhillips, Hewlett-Packard, Honeywell, Ingersoll-Rand, Intel, Motorola, Valero Energy and Verizon.