Aflac Shareholders: Pay Just Ducky

In the first stockholder vote on executive pay by a major U.S. company, shareholders of Aflac yesterday approved more than $12 million in compensation for Chairman and CEO Dan Amos, according to various news reports. Yet there's a growing consensus that say on pay is losing momentum.

More than halfway through the annual shareholder-meeting season, The Washington Post reports today, proposals aimed at giving stockholders an advisory vote on executive pay packages have failed to win widespread support.

So far only two say on pay proposals received majority support--at Apple and Lexmark International. Neither has agreed to give shareholders a formal say.

To the surprise of advocates, these measures have received less support than they did last year at most financial companies, despite anger over handsome executive payouts made as share prices plunged. At Citigroup, Merrill Lynch, Morgan Stanley, Wachovia and U.S. Bancorp, support for such proposals declined this season.

"I thought we'd have a couple of more majority votes earlier on," Richard Ferlauto, director of pension-investment policy at the American Federation of State, County and Municipal Employees told the Post, which is sponsoring many of the more than 90 say-on-pay proposals. "There hasn't been an across-the-board breakthrough yet."

Richard Ferlauto 

Aflac said that the vote on the pay packages of the insurer's five top executives was approved by 93 percent of the votes.

The resounding vote of confidence did not surprise compensation experts. “Aflac is well suited for a say-on-pay vote because it has a good story to tell to shareholders,” Irving S. Becker, who heads up the Hay Group’s executive compensation practice, told The New York Times. “Aflac’s C.E.O. has created a lot of value for shareholders over his long tenure, and his pay package is shareholder-friendly.”

Aflac sells insurance in the U.S and Japan and was founded in 1955 by Amos’ father, Paul Amos, and Paul’s brothers John and Bill. Dan Amos has been the CEO of the company for the last 18 years.