In 2016, Treasurer Seth Magaziner has voted “no” on executive compensation plans at 75 companies, including Facebook, eBay, and the parent company of Google, “due to a misalignment between CEO pay and company performance or because the compensation plans were deemed excessive or otherwise inappropriate.”
“My job as Treasurer is to deliver strong financial performance for the state’s pension fund. When the companies we invest in award excessive pay packages to executives, it comes at the expense of the pension fund and the public employees we serve,” Magaziner said. “Our say-on-pay effort reflects our position that executive compensation should be transparent and based on performance.”
Earlier this year Magaziner announced that he will use the power of the Treasurer’s office to “vote against appointing white men to corporate boards of directors that are already comprised of mostly white men.” This latest announcement can be seen as a continuation of Magaziner’s belief that corporate reform can come through ethical voting from progressive investors.
Magaziner says that since the 1970s, inflation-adjusted CEO pay in the U.S. increased by almost 1,000 percent, according to a study last year from the Economic Policy Institute. Six of the highest paid U.S. CEOs make more than 300 times the salary of their typical employee, according to the compensation analysis firm PayScale.
Facing increasing shareholder advocacy amid a volatile market and slower growth rates, many of America’s biggest corporations are under an intense spotlight to link chief executive pay to company performance, according to the Korn Ferry Hay Group 2015 CEO Compensation Study.
Magaziner has sent a letter to all companies that received “no” votes to inform them of Rhode Island’s opposition to their executive pay packages, and offer to open a dialogue about how they can make progress on this important issue.