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On Behalf of its Pension Funds, Union Opposed Higher Pay for Poor Performance
HOUSTON (May 20, 2014) – Shareholders of the Willbros Group, a major energy infrastructure company, rejected the board’s executive pay proposal at their annual meeting today, representing a rare victory for institutional shareholders seeking better corporate governance.
Unofficial tallies from the meeting indicate about 53 percent of shares voted were in opposition to the board’s executive pay proposal. According to executive compensation experts, including Equilar, only about 2 percent of efforts to defeat board pay proposals are successful.
LIUNA – the Laborers’ International Union of North America – brought a message of accountability to the annual meeting as part of its effort to address performance and governance issues.
The union called for shareholders to vote against the board’s executive pay proposal because CEO and other top management have seen a long-term upward trend in pay despite low long-term shareholder returns. Analysts have reported that losses in the company’s oil and gas division have affected the entire company. While the stock price of its competitors have a median growth of 71.7 percent over five years as of April 30, Willbros has lagged far behind at 3.9 percent.
Earlier this month, LIUNA organized a meeting of pension funds and money managers during the Council of Institutional Investors Conference to discuss the company’s future. Those attending represented funds with more than $1 trillion in investments and money managers with more than $4.5 trillion in investments.
In addition to urging opposition to the executive compensation proposal, LIUNA urged votes against the two board members up for re-election. According to unofficial results, about a third of non-insider shares were cast against re-election, a significant indicator of discontent with the direction of the company.