Shareholders soundly rejected FleetCor Technologies' pay plan that made the Norcross company's CEO the highest-paid in Georgia last year.
At FleetCor’s annual shareholder meeting on Wednesday, almost 63 percent of shareholders voted “no” in the company’s so-called “say on pay” vote, according to Dana Wise, with a pension advisory firm that criticized FleetCor’s pay policies. The vote is non-binding.
“Only five companies (in the Fortune 1000) so far this year have had a negative vote on executive pay, and now FleetCor joins them,” said Wise, deputy director of CtW Investment Group, which advises union pension funds of such issues.
FleetCor did not respond to a reporter’s requests for comment before this story was posted.
FleetCor Chief Executive Ronald Clarke, 61, was paid $29.4 million last year, even though the little-known payment card company he heads is one of the smallest companies in the Fortune 1000, which ranks companies by revenue.
After his $19.2 million raise last year — also the largest among Georgia companies — Clarke’s pay put him ahead of CEOs at some of corporate America’s giants, including Coca-Cola, Home Depot, Ford, Chevron, Visa, Mastercard, General Electric and Microsoft.
Typically, CEOs' pay raises shrink and company values go up when shareholders get to vote on top executives' pay levels, according to a recent study by University of Georgia and Federal Reserve researchers.
After studying pay and financial data for 17,000 public companies in 38 countries, the researchers found that CEO pay levels lagged by 7 percent in the 11 nations that adopted so-called “say-on-pay” laws.
But this is the second time FleetCor shareholders have voted against the company’s pay policies after proxy advisory firms and other critics called Clarke’s pay excessive and poorly explained.
Shareholders likewise voted against FleetCor’s pay plan in 2014, by 70 percent of the total, the last time they got to vote.
In another rebuke against FleetCor, shareholders also opted on Wednesday — with 78 percent in favor — for annual votes on executive pay, rather than once every three years as the company wanted. That vote, also, is non-binding.
“From the outside, it seems that FleetCor’s board is ignoring its shareholders,” said Wise. He said large investors such as pension funds will now likely seek discussions with FleetCor’s board of directors on how it plans to address shareholders’ concerns.
“No company yet has had three negative votes” on its pay plans, he said.
The say-on-pay rule is part of the 2010 Dodd-Frank financial reform law that the Obama administration championed after the 2008 financial crisis. It requires publicly-held companies to give shareholders a non-binding vote on whether they approve of top executives’ pay packages.
President Donald Trump vowed during his campaign to dismantle the sweeping Dodd-Frank law, but so far he hasn’t targeted the say-on-pay rule.
In other Business news:
About the Author
