Investor Outrage Reaches Record Levels

But support for shareowner proposals was slowly inching up even before the barrage of press over corporate scandals. In 1999, only 21% of shareowner proposals received more than 50% of votes cast, according to the Investor Responsibility Research Center. By 2001, that figure had increased to 24%; by last year, fully a third of proposals won a majority vote.

There's reason to think the number of measures approved could continue to rise. Unlike in the late '90s, few CEOs today can justify big rewards on the grounds that they're enriching shareholders. And amid widespread layoffs at many companies, generous payouts increasingly look unseemly. Last October, Federal Reserve President William McDonough called for executive pay to be reined in to "more reasonable and justifiable levels," noting that CEO pay has soared to 400 times that of production workers on average, up from 42 times two decades ago.

Investors can claim some notable successes this season. Shareowners of Hewlett-Packard approved a resolution to make large severance packages subject to their approval, following criticism of former president Michael Capellas' $26 million severance payout. The company declined to release the vote tally, but said it was close. In March, Tyco shareholders voted by a 58% to 42% margin to approve a similar measure.

In a few cases, peeved shareholders have sought far more sweeping changes. Citigroup(C Quote) shareholder Thomas Gavitt argued in his shareowner proposal, which appears on the company's proxy, that Citigroup's reputation has suffered because of "acts of fraud and collusion by senior managers." His proposal demands that managers who took home bonuses or exercised options anytime between 1998 and 2002 forfeit the money and pay triple damages back to the company.

Though Gavitt's measure holds little hope of passage, it underscores the degree of shareholder anger over corporate governance lapses.

Granted, because shareowner proposals are nonbinding, corporate boards could simply ignore them. But board members would be putting their own jobs at risk, since annoyed shareholders could replace them with a more responsive lineup at the next annual meeting.

"Anyone who ignores a strong shareholder vote does so at their peril," says Minow.