Investor Outrage Reaches Record Levels

Along similar lines, Delta(DAL Quote) CEO Leo Mullin said earlier this month that he would voluntarily slash his compensation by $9.1 million this year, taking a 25% pay cut and forgoing any bonus. Mullin took home nearly $13 million in compensation last year, a period in which the company lost $1.27 billion. Last year it announced layoffs of 8,000 people, out of a staff of about 76,000.

While those reforms are welcome, they may not be enough to satisfy angry investors. All three companies face a slate of other proposals on compensation at their annual meetings. Others in the hot seat on pay include Boeing(BA Quote) and Citigroup(C Quote).

Meanwhile, some companies are bluntly resisting reform efforts. "It's become more common for companies to go to the SEC and ask to omit proposals from their proxies," says Elizabeth Fender, managing director of corporate governance for TIAA-CREF. "They [point to] rules that say shareholders can't ask about things that are ordinary business, that a proposal is vague and misleading, that it doesn't have the power to implement a proposal, that it contains false and misleading statements." SBC(SBC Quote) initially balked on a resolution to tie options grants to performance and impose holding periods, though it later added the measure to its proxy. Siebel(SEBL Quote) has opposed a similar resolution.

At the Corporate Library, Nell Minow recalls a time one company, Stone & Webster(SWBIQ Quote), rejected her shareholder proposal on the grounds that it was "misleading" because it described one of the directors as having been on the board for half a century.

Mad as Hell... Shareholders are focusing on compensation reform
Company	Shareholder reform proposals
Boeing	Seek shareholder approval for severance agreements if there is a change in control of our Company. Seek shareholder approval of senior executive participation in supplemental retirement plan(s). Tie future stock option grants to performance.
Citigroup	Seek shareholder approval for future severance agreements. Require all senior managers forfeit any bonuses or options received between 1998 and 2002 and pay triple damages back into corporate coffers, in light of ethical lapses. Consider terminating all senior stock option programs and bonus programs in the future.
Coca-Cola	Terminate the restricted stock program and return all share awards to company. Make all future stock option grants performance-based. Conduct a compensation review and consider freezing executive pay during periods of large layoffs, setting up a maximum ratio between the highest-paid executive officer and lowest-paid employee, and obtaining shareholder approval for severance payments.
Delta	Seek shareholder approval for future severance.
GE	Tie future stock option grants to performance. Seek shareholder approval for severance agreements. Request the compensation committee to prepare report comparing the total compensation of top executives and its lowest paid workers.
Source: Company proxy statements

The company protested that the director had only been on the board for 49 and a half years. (It finally relented to shareholder pressure and replaced eight of its directors.)

For that matter, submitting proposals for a vote is only the first step; winning approval from shareowners is even more difficult. Typically, investors have voted in line with corporate boards, which invariably oppose reforms.