The proposal was sponsored by Christian Brothers Investment Services (CBIS), a leading socially responsible investment group. It was supported by several huge state and municipal funds, including the California Public Employees’ Retirement System, Sacramento and the Florida State Board of Administration, Tallahassee.
“This majority vote by Cisco’s shareholders sends a clear message. The onus is now on Cisco to take a leadership stance and enact Say on Pay before federal legislation mandates such policies for all public corporations,” said Julie Tanner, Assistant Director of Socially Responsible Investing (SRI) at CBIS. “We call on Cisco’s board to be as responsive to its investors and immediately issue a statement on how it plans to demonstrate its acknowledgement of shareholder concerns.”
Cisco said its board of directors “will study closely the various ways companies have implemented the say-on-pay proposals and develop an appropriate plan.”
A growing number of companies have been adopting say-on-pay in response to increasing shareholder anger over executive compensation. The list includes Microsoft Corp., Apple Inc., H&R Block Inc., Intel Corp. and Verizon Communications Inc.
Many pension plans and governance experts view say-on-pay as a way to curb runaway compensation, especially at companies struggling with a weak economy or falling stock price.
CBIS said its resolution grew out of concern “about the growing disparity between the highest and lowest paid workers and excessive executive compensation at Cisco. We seek to dialogue with Cisco about adjusting executive pay to more reasonable and justifiable levels and sharing financial success with employees at all levels of the company.”
More background on CBIS engagement with Cisco can be found here.