State steps up efforts against excessive corporate pay
Published: Friday, January 19, 2007 at 6:01 a.m.
Last Modified: Thursday, January 18, 2007 at 11:35 p.m.
TALLAHASSEE — Florida, a Wall Street giant with $150 billion worth of pension and other investments, is stepping up efforts to punish corporations that give managers excessive compensation, according to a report presented Thursday to the State Board of Administration.
Florida in the past year increased its proxy votes against board members of corporations that paid excessive compensation by 50 percent in 2006 over the previous year, SBA executive director Coleman Stipanovich told the three-member board chaired by Gov. Charlie Crist.
"That's the root of the cancer," Stipanovich said, as he presented the report. "If we can get the right board of directors, you won't have these types of abuses."
Crist and the other board members, Attorney General Bill McCollum and Chief Financial Officer Alex Sink, unanimously accepted the report.
Stipanovich cited the recent example of Home Depot, which gave former Chairman and CEO Bob Nardelli a $210 million severance package although the company's stock declined under his leadership.
Corporate executives "are getting these millions of dollars — hundreds of millions of dollars — in bonuses," Stipanovich said. "It's not tied to performance."
He said Florida has been working on the issue with the New York Stock Exchange, Council of Institutional Investors and other entities.
The state also is developing a pay-for-compensation matrix that corporations can use based on a five-year study of executive compensation, Stipanovich said.
Crist later said Stipanovich is "on the right track."
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