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The meetings are extraordinary in that, rather than conducted with typical politeness, they are at the forefront of expressions of anger by ordinary shareholders and large institutional investors. The outcries in such a public forum are hotly contentious, as some investors argue: “Bringing these things to a head is very destabilising – for companies, employees and our investment,” according to the Financial Times:



Others defend that this anger must be expressed. The Financial Times quotes shareholders arguing that: “We are fed up with companies coming back with poorly structured pay plans year after year.” Another says: “We have reached a point where we are saying we have to change the mindset and if that requires sacrificing a head, so be it.”



Though some analysts have dismissed the “pay revolts” as reactionary fervor that will fade away, many of the shareholders argue the contrary. The Financial Times summarizes the position of Robert Talbut, the chief investment officer of Royal London Asset Management: “The no-votes do not simply reflect poor communication between boards and owners. Nor should the no-votes be seen as a sudden knee jerk. Instead, they reflect calls for ’fundamental reform’ aligning pay to performance.”



These pay revolts are also connected to a larger call for reform of corporate behaviour. The Financial Times quotes Sarah Wilson, chief executive at Manifest, a voting agency, explaining that: “Remuneration is the window to the soul of the company. It objectively measures the links between incentives, behaviour, strategy and outcomes.” In this light, the shareholder revolts are a widespread expression of the need for change in pay structures and broader corporate culture.



A summary of the events at recent shareholder meetings follows:



Barclays



At Barclay’s annual shareholder meeting, 32% (including those abstaining) voted against the company’s executive remuneration package. Almost 21% voted against the re-election of the chairman of the remuneration committee, Alison Carnwath. Though the majority still voted for the plans, this is a far greater number displeased than the 10% who voted against the plans last year. Beyond the votes, anger was expressed through protests from groups such as the World Development Movement, advocates for the “Robin Hood tax,” and FairPensions, yells and laughs during the meeting, and even apologies from the chairman Marcus Agius for the policies and promises to take the discontent seriously. The votes are non-binding, but weigh considerably upon the bank leadership.



The votes came in the context of Barclay’s announcement that it may fail to hit its 13% target for ROE by 2013, though their stock has risen 27% over the past year. The most contentious executive pay package is CEO Bob Diamond’s £12 million package, including a £5.75 million contribution towards his personal tax bill. Both Diamond and Finance Director Chris Lucas agreed to take only half of their 2011 bonuses until certain growth targets were met.



City Group



More than 55% of City Group shareholders voted down CEO Vikram Pandit’s $15 million pay package for 2011. In 2011, City Group’s stock fell 44%, while its market cap fell 64%. These votes are also non-binding, but seen as a statement by the shareholders to be taken seriously and a also a test of the provision of the new Dodd-Frank bill giving shareholder’s the right to vote on executive compensation in the US.



Credit Suisse



Almost 1/3 of shareholders voted against their remuneration package. Rudolf Weber, to applause from other shareholders stated: “You should be ashamed of yourselves for taking so much money away from us. We are the owners of this bank, and you are our employees. We should be the ones who decide what you earn.”



The top earner at Credit Suisse was “Robert Shafir, who earned 8.5 million francs for running the asset management arm which posted a 10 per cent rise in pre-tax profit.” At the same time Credit Suisse is cutting 3,500 jobs.



UBS



The shareholders at UBS issued a strong statement to the board, with more than 39% opposing the formal approval of the board and top management for 2011 and only 53% approval. Only 60% approved the pay plan and they failed to reach the 2/3 majority necessary to issue new shares.



Some of the key pay offerings disputed were 1) the offer to the incoming chairman Axel Weber of 2 million CHF, and 200,000 in UBS stocks and the potential pay of Andrea Orcel., another new recruit. The Financial Times quotes Brigitta Moser-Harder, a small shareholder speaking at the meeting: “Big banker pay hasn’t been tamed at all. It’s as though UBS hasn’t learnt any lessons at all from the past crises.”



This anger comes in the context of a 28% drop in share price in 2011 and the $2.25 billion unauthorised trading loss, while the 12 members of the executive board are being paid 70.1million CHF, and 91 million the year before. They expect more shareholder anger than at Credit Suisse or possibly even Barclays because of the trading scandal’s exposure of poor risk management. They have faced pressure at their shareholder meetings over executive pay for the past 2 years.



Aviva



Aviva lost its shareholder vote on executive pay with almost a 60% vote against, in “the first such defeat for a FTSE 100 company in three years” (Financial Times). After this display of anger, Chief Executive Andrew Moss faced many calls to step down. Despite this vote, the board has decided not to change the pay plan, but consider the votes in future decisions. This decision may become another crucial example for the case to make these votes binding rather than advisory.



Standard Charter



Shareholder advisory group Pirc is advising shareholders to vote down the Standard Charter’s pay package. They reference the $13.4 million pay package of Mike Rees, head of wholesale banking, as excessive pay rewarding short-term performance.





Deutsche Bank



Fund manager Hermes is encouraging shareholders to vote against Deutsche Bank’s pay package in their upcoming shareholder meeting.



Occupy Protests- Shareholder meetings of Wells Fargo and Bank of America



In the shareholder meeting of Wells Fargo in San Francisco, an estimated 500 to 1200 protesters demonstrated outside and some attended and disrupted the meeting, while about 150 were denied entry and others were escorted out.



Protesters want to attend Bank of America’s May 9^th shareholder’s meeting and have written to the CEO to meet beforehand and encourage him to allow their entry into the meeting.



Campaigns:



Responsible investment group, FairPensions, launched a campaign and website to encourage action against excessive executive pay. The campaign website is www.yoursayonpay.org.uk and allows you to simply enter your pension or ISA provider name and so send an email to the provider asking it to vote against excessive remuneration in the companies it invests in.