Ting Shen—Bloomberg/Getty Images
Sophie Mellor
Tue, May 17, 2022
Intel shareholders voted against the company’s executive compensation program last week, which included part of a $178.6 million payout to CEO Pat Gelsinger, according to a regulatory filing published Monday.
Around 1.78 billion votes, making up around 54.2% of shareholders of the chip-manufacturing giant, were cast against the executive compensation, while 932 million votes were made in favor. Around 577 million votes abstained or were broker nonvotes.
The vote is advisory and won’t take immediate effect, but it indicates that a growing number of stockholders are pushing back on hefty executive compensation packages at Intel, which beat first-quarter results targets, but forecast lower growth for the second quarter. The vote also puts keener scrutiny on CEO Pat Gelsinger and his $43.5 billion plan to revive Intel, which includes a €33 billion European spending spree to expand Intel’s presence across the bloc and ease the semiconductor chip shortage.
The filing revealed that Alyssa Henry, an executive vice president at Square and 57th richest self-made woman, according to Forbes, was kept on Intel's board of directors by a narrow margin. While 1.36 million stockholders voted to keep her on as an Intel director, 1.34 million voted to kick her off—a rare close tally in a shareholder vote.
“We take our investors’ feedback very seriously, and we are committed to engaging with them and addressing their concerns,” Intel said in a statement to Fortune. The company added that it has taken specific steps to address investor questions and to clearly link pay to performance, but added that "there is clearly more work to do.”
The company also said, "Intel’s Board of Directors will work with Alyssa Henry to address the over-boarding concerns raised by stockholders."
Executive pay pushback
This isn’t the first time shareholders have voted against executive compensation packages in recent months. Shareholders at AT&T, Phillips, and General Electric all voted against hiking CEO pay and executive compensation packages after poor results this year.
Proxy votes against executive pay at S&P 500 companies became more common last year, according to a report by As You Sow, a shareholder advocacy group focused on ESG matters. After many companies released earnings with "questionable practices and metrics"—easing performance targets during the COVID-19 pandemic, for example—shareholders voted to push back on executive compensation at record numbers.
In 2021, a record 16 companies had the pay of their executives rejected by more than half of their investors—up from 10 in 2020 and seven in 2019, according to the report.
In Intel's case, Gelsinger, who took over as CEO in February 2021, was hired to turn the company around and return it to its former glory. In the hopes of beating out rival AMD, Intel has been shoring up the company's presence and manufacturing capabilities in the U.S. and Europe.
A lot is riding on this for Gelsinger. If all goes according to plan and Intel’s stock triples in five years, the new CEO would take home the entire $180 million pay package signed in 2021.
“The Compensation Committee believed that having 73% of the CEO’s new-hire equity awards contingent on achieving ambitious stock price growth was in the best interest of Intel and its stockholders,” Intel said in its proxy filing published in May 2022.
Gelsinger’s payout is far from guaranteed as things stand today. Intel's stock is trading lower than when Gelsinger took the helm, a situation that was not helped by the company’s first-quarter earnings report; Intel forecast its second-quarter revenue and profit would come in well below Wall Street expectations, citing weak demand in its largest market (PCs) and increased supply chain uncertainty due to COVID-19 lockdowns in China. Shares in Intel fell 4% on the news.
This story was originally featured on Fortune.com
Tue, May 17, 2022
By David Henry
NEW YORK (Reuters) -In an unusual rebuke for Jamie Dimon, CEO of JPMorgan Chase & Co, shareholders on Tuesday clearly disapproved of the special $52.6 million stock option award directors gave him last year to stay on the job for at least five more years.
In an advisory say-on-pay referendum, only 31% of votes cast endorsed JPMorgan executive payments for 2021, according to a preliminary count announced at the company's annual meeting.
Because of the special award this year two major advisory firms, from which investors take their cue when voting, had recommended "no" votes on pay.
Institutional Shareholder Services Inc and Glass Lewis & Co criticized Dimon's options as lacking performance criteria for vesting.
In eight of the last 12 years JPMorgan had won approval from more than 90% of votes cast in its annual compensation ballots.
Dimon, 66, will keep the award, but such votes are closely followed as a test of investors' attitudes toward executive pay and what payouts they will tolerate.
Average support for pay packages at S&P 500 companies was 88.3% in 2021, down from 89.6% in 2020 and 90% in 2019, according to consulting firm Semler Brossy.
In response to the vote, JPMorgan directors pointed out through a spokesman the special award was extremely rare and the first for Dimon in more than a decade.
Directors said before the vote that the special award would not be recurring and "reflects the board's desire for him to continue to lead the firm for a further significant number of years."
The board said before the vote it made the award in consideration of Dimon's performance, his leadership since 2005 and "management succession planning amidst a highly competitive landscape for executive leadership talent."
If Dimon, a billionaire, keeps working at the bank for five years the options will vest, although he could still receive them if he leaves to work for the government or to run for public office.
Stock from the options must be held until 10 years after being granted.
The award was separate from Dimon's usual annual pay package, which was up 10% to $34.5 million for 2021.
The board prevailed in its recommendations on all other issues. All directors, including Dimon, were re-elected with more than 92% of the votes cast, according to preliminary figures.
Two shareholder proposals on fossil fuel financing received only 11% and 15% of votes cast, consistent with weak support recently for initiatives at Bank of America, Citigroup and Wells Fargo, as well as at big oil companies.
(Reporting by David Henry in New York. Additional reporting by Noor Zainab Hussain in Bangalore.Editing by Nick Zieminski and Chris Reese)
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