Shareholders aren’t voting on proxy issues dealing with executive pay.  With the proxy voting season more than half done (there are only a few companies left with shareholder votes), a somewhat disturbing trend is developing with regard to "say on pay." Through proxy voting, shareholders can make their will known.
 And this year, with such companies as Citigroup (C) and Merrill Lynch (MER), among other financials, it is obvious that something is wrong when – after disastrous policies – executives walk away with millions in gifts as they leave their companies.

Interestingly, reports BloggingStocks, only 37% of shareholder votes weighed in on executive compensation. This is down from last year’s 43% support for shareholder input on executive compensation:

Part of the problem may be that individual investors aren’t voting. But I also wonder whether there’s some home cooking going on. Are the large institutional shareholders that control the bulk of these companies voting to keep the executive pay gravy train flowing because they have a personal stake in it?

Individual shareholders have to coordinate and band together to make a big difference in proxy voting. Additionally, many shareholders actually cede their proxy voting powers over to fund managers. When you invest in a mutual fund or some other type of fund that someone else manages, often you turn your proxy voting power over with it.

It is possible to direct your proxy voting power in a way that you approve of. The Rockefeller family is trying to drum up support for major changes at Exxon (XOM) – including to executive pay – at the May 28 vote. David Neubert turned his proxy voting at Chevron (CVX) over to Amazon Watch in order to encourage the company to make changes that are more environmentally friendly.

Proxy voting is a way to make your wishes known, and can be a way for investors to get companies they invest in to make positive changes in keeping with their values.

Disclosure: I own none of the companies listed above. Citi does hold my student loans, though.

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