PHILADELPHIA (AP) – A proposal to give shareholders an advisory vote on executives' pay packages at Comcast Corp. failed to gain traction Wednesday, with the chief executive saying such a practice raises "troubling aspects" about the direction of American capitalism.
At the annual stockholders meeting of the nation's largest cable TV operator, a "say on pay" proposal didn't get enough shareholder votes to pass. It is the third consecutive year that an annual vote on pay has been proposed – and defeated.
CEO Brian Roberts said executive pay has long functioned within the purview of a company's board of directors, and a shareholder vote on compensation raises "the troubling aspects of how capitalism functions in American business and the world economy."
The current system in which the board of directors determined compensation "worked well in America for a long time," he added.
But during a question-and-answer session, one shareholder insisted that stockholders should determine CEO pay as owners of the company, and that executives have nothing to fear by allowing a vote. The vote would be nonbinding, but a company could face a public relations backlash by disregarding it.
Last week, Comcast rival Verizon Communications Inc. easily passed its own "say on pay" test when shareholders overwhelming approved executive pay packages. In 2008, CEO Ivan Seidenberg got $20.2 million in compensation based on calculations by The Associated Press.
Verizon gave shareholders the right to vote on pay at the 2007 annual meeting.
Shareholders of Qwest Communications International Inc. have rejected proposals to give themselves an advisory vote on the company's executive pay and give large shareholders the power to call a special meeting.
However, the two proposals drew many votes by shareholder standards at the phone company's annual meeting in Denver on Wednesday morning.
The proposal to give owners of 10 percent or more of the company's shares the power to call a special meeting got a 47 percent "yes" vote. The "say on pay" proposal had 31 percent of shares voted in favor.
Such "say on pay" proposals have been around for a few years but gained traction of late, especially after President Obama required the vote for companies getting government bailouts.
Roberts was awarded a $24.7 million pay package last year, according to an Associated Press formula that factors in salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation, and the estimated value of stock options and awards granted during the year.
Roberts' pay has long been a sore point for shareholders. This year, shareholders put forward four proposals to curb pay and diminish Roberts' control over Comcast: allow an annual vote on executive pay, identify executives making at least $500,000 a year, abolish a dual-class structure that gives Roberts voting power that's greater than his ownership, and remove all "golden coffin" deals that provide executive pay and benefits even after death.
All shareholder proposals failed to pass.
The AFL-CIO said compensation is supposed to motivate and retain talented executives, tying rewards to performance. But "golden coffin" remuneration can't do all of that.
"Companies claim that these agreements are designed to retain executives. But death defeats this argument," the union said in the proxy statement.
Last month, Comcast said in a regulatory filing that Roberts has agreed to give up the salary, annual bonus and insurance-related benefits that would have been paid to his heirs for five years after his death.
His father, Comcast founder Ralph Roberts, also gave up similar death benefits last year.