Sun Shareholders Vote for Say in Exec Pay
At the company's annual shareholder meeting Wednesday, two-thirds of Sun shareholders demanded a greater voice in setting pay packages for the company's top brass.
The 67% vote of shares in favor of the so-called "say on pay" proposal marked the highest level of support for such a measure at a large-cap company, according to the measure's sponsor, and underscored the dissatisfaction and loss of patience among Sun shareholders.
"We've reached a tipping point in the outrage toward extraordinary CEO pay unrelated to performance," said Rich Ferlauto, of the American Federation of State, County and Municipal Employee Pension Plans, which helped sponsor the measure.The Santa Clara, Calif., computer maker has struggled to turn a profit for years, even as competitors such as IBM (IBM) and Hewlett-Packard (HPQ) have thrived. Last week, Sun posted a $1.7 billion loss for its fiscal first quarter that included a writedown of all the goodwill value associated with its computer systems business. Sun's stock, which slipped 31 cents to $4.62 Wednesday, is trading at its lowest level in more than 10 years and is down 76% since the company implemented a reverse stock split last November that boosted the share price to around $20. A slew of investors gathered in Sun's corporate auditorium took turns at a microphone Wednesday to vent their frustration with the company, its management and its board: How can the company justify bonuses paid to any of Sun's executives? Why is Sun failing while its rivals continue to increase their revenue? What does the company's management have to say about the failed reverse stock split?
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