Half a Billion Shareholder Votes Ask Corporations to Narrow Wage Gap

Shareholders at eight U.S. corporations cast more than 500 million votes this spring for proposals to shrink the wage gap within corporations. The shareholder resolutions were introduced by members and supporters of Responsible Wealth.

The resolution on gender and race pay equity at printing giant R.R. Donnelley, co-sponsored by the Domini Social Equity Fund, drew the greatest shareholder support -- 16.6%.  Voting results on resolutions to tie CEO pay to the lowest paid employee at the company ranged from 12% in favor at AlliedSignal and 10.8% at Citigroup to 4.8% at BankBoston.  (See attached sheet for complete voting results.) Some of these results are surprisingly high given voting procedures that favor management positions on proxy resolutions; double-digit votes on shareholder resolutions are rare.

"We believe healthy companies see business as a shared enterprise where employees share equitably in both the rewards and the sacrifices," said Responsible Wealth co-director Scott Klinger. Responsible Wealth members particularly sought out companies where corporate leaders received large pay increases while at the same time many employees were losing their jobs.

Responsible Wealth's shareholder campaign has succeeded in starting a dialogue on excessive CEO pay.  In response to the resolutions, the CEOs of AT&T, BankAmerica and BankBoston publicly acknowledged that growing economic inequality is a problem both for society and for business. Each, however, declined to support the proposed remedy. More than 50 AT&T shareholders (including CEOs, AT&T employees and retirees, and clergy) sent messages of thanks and support to Responsible Wealth member Judith Barnet, filer of the AT&T pay ratio resolution.

Responsible Wealth members also took their message to the general public outside Citigroup's annual meeting, held in New York's Carnegie Hall.  Standing beside two wheelbarrows representing the pay disparity between Citigroup co-CEO Sanford Weill and the typical Citibank teller, Responsible Wealth members handed out fortune cookies containing educational messages about wage inequality to passersby and to shareholders entering the meeting.  Among those who stopped next to the wheelbarrows -- one heaped full of 5,566 fortune cookies and the other containing a single cookie -- was a woman with her young daughter. Tearfully, she explained that she was one of the 10,400 Citigroup employees who had been downsized the previous year.

Responsible Wealth's shareholder activities will continue through the summer and  next year. In August a CEO pay ratio resolution will be voted on by shareholders of Computer Associates, a company called "a cautionary example of high pay" for executives by the Wall Street Journal. Responsible Wealth's priorities for next proxy season include resubmitting CEO pay resolutions at several companies, adding new companies for CEO pay resolutions, and extending its focus to address corporate governance structures that have contributed to out-of-control CEO pay. Responsible Wealth members will ask their mutual fund managers to disclose their proxy voting records, information now kept secret by most mutual funds.

Responsible Wealth, a project of United for a Fair Economy, is a growing network of over 400 business people, investors and other affluent Americans in the top 5% of income and wealth working together to reverse the trend toward growing economic inequality.

1999 Voting Results for Responsible Wealth Shareholder Resolutions

AlliedSignal (4/26/99)
Tie CEO pay to multiple of lowest worker pay
50,917,056  FOR  (12.0%)
374,917,903  AGAINST  (88.0%)

AT&T (5/19/99)
Tie CEO pay to multiple of lowest worker pay
114,007,891  FOR  (7.6%)
1,426,628,172  AGAINST  (92.4%)

BankAmerica (4/28/99)
Tie CEO pay at multiple of lowest worker pay
(unofficial results)
80,786,200  FOR  (6.7%)
1,124,975,000  AGAINST  (93.3%)

BankBoston (4/22/99)
Tie CEO pay at multiple of lowest worker pay
10,524,265  FOR  (4.8%)
204,819,353  AGAINST  (95.2%)

Citigroup (4/20/99)
Tie CEO pay at multiple of lowest worker pay
157,851,979  FOR  (10.8%)
1,299,513,709  AGAINST  (89.2%)

General Electric (4/21/99)
Tie CEO pay at multiple of lowest worker pay
 (unofficial results)
FOR  5%
AGAINST  95%

Huffy (4/22/99)
Report on CEO pay as multiple of lowest worker pay
751,273  FOR  (8.3%)
8,301,804  AGAINST  (91.7%)

R.R. Donnelley (3/25/99)
Report on Pay Equity for women and minorities
18,339,202 FOR  (16.6%)
92,019,201 AGAINST (83.4%)

Notes:

All voting percentages calculated according to SEC formula used to determine resubmission thresholds -- (Yes Votes)/(Yes + No Votes). 

Abstentions and Broker Non-Votes not counted in denominator.

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