Shareholders of BlackBerry and CI Financial have rejected the companies’ approach to executive compensation in “say on pay” votes at their annual shareholder meetings on Wednesday, showing their displeasure with some of the directors they see as responsible.
Say-on-pay votes are a corporate governance practice that allows shareholders to show their approval, or lack thereof, for corporate boards’ pay policies for their companies’ top executives in a vote at annual general meetings.
The votes are advisory and non-binding, which means shareholders cannot override a board of directors’ compensation decisions.
However, the measures are an important way for shareholders to express their views about companies’ pay practices, rather than targeting individual directors who help set compensation.
Such votes at annual meetings that are described as “advisory” traditionally receive shareholder support.
BlackBerry said it had received 44 per cent support for its pay philosophy, with 56 per cent of shareholders voting against it. CI Financial received 45 per cent support, with 55 per cent opposition.
Both CI and BlackBerry faced negative recommendations from major proxy advisers, which advise institutional investors on how to vote their shares.
Institutional Shareholder Services Inc. (ISS), Glass Lewis & Co. and Egan-Jones Proxy Research recommended “no” votes on CI Financial’s pay measures.
It was the second year in a row all three made this recommendation for CI, with ISS and Glass Lewis saying CI needed to do a better job of linking pay to performance for all its top executives.
BlackBerry also got negative recommendations from ISS and Glass Lewis for the second year in a row,with the payout of a portion of a large 2018 stock award for chief executive John Chen a particular issue this year.
Egan-Jones recommended a “yes” vote at BlackBerry this year, after saying no in 2021.
Phil Kurtz, BlackBerry’s deputy general counsel and corporate secretary, announced the result at the meeting, and said:
“The company is disappointed and BlackBerry will get more feedback from shareholders after the meeting, “
Shareholders in the two companies are now letting both companies know that are are displeased. In corporate director elections, the only choices are to vote “yes” for a director or “withhold” votes.