Father Conti’s Mission: Rein In Executive Pay : Compensation: The priest helped persuade the SEC to give investors a non-binding say.

To the elderly and infirm who live in the Regina Continuing Care Center, the gentle, ruddy-faced man in the cleric’s collar is simply Father Conti.

Monsignor Leo Conti earns about $7,200 a year tending their spiritual needs. He is a man at peace, his worldly needs met by the Roman Catholic Church.

Could this be the same person whose shareholder proposals have sent shudders through the boardrooms of America’s largest corporations?

With only 76 shares of Bell Atlantic stock, Conti started battling four years ago to rein in the runaway pay of top executives. On a manual typewriter in his modest apartment, he drafted briefs supporting shareholder rights and sent them to the Securities and Exchange Commission, the government’s stock watchdog.

Now he embodies the national tide of resentment against the bloated compensation packages paid to corporate executives.

Conti and others shareholders who have spoken out were vindicated Feb. 13 when the SEC gave shareholders a non-binding say in how much top corporate officials are paid.

It was a nominal victory, but one Conti had pursued for four years.

“It comes down to an issue of basic Christian justice,” says the gregarious 67-year-old, whose smile seems too wide for his face.

“Four years ago it was different. There was no groundswell for this. Today, you find a different climate. You pick up The New York Times and every day you read about more people railing out against this legalized corporate theft.”

Conti, the only child of two pharmacists, grew up in Providence, R.I., where the family attended Mass regularly and Conti became enthralled with its grandeur. By age 8, he knew he would become a priest.

“The opportunity to help people get to heaven, that was the bottom line,” he says.

He entered St. Mary’s Seminary at Emmitsburg, Md., after graduating from Providence College in the early 1940s. He was ordained and sent to Evansville, a working-class town of about 125,000 in Indiana’s southwestern tip.

Conti, a parish priest who has worked street corners during public events to reach non-practicing Catholics and those who have no church, now celebrates Mass six days a week at the nursing home chapel.

Much of his philosophy is grounded in a writing by Pope Leo XIII in 1894. It says workers should be paid enough so that they and their families could maintain a lifestyle “in keeping with their Christian dignity.”

“There should be some Judeo-Christian sense of proportion in relation to what top people make and what workers on the line make,” he says.

Corporate finances were foreign to Conti when, in 1981, his mother willed him 19 shares of AT&T; stock. In 1984, when the former phone monopoly divested itself of its Baby Bells, Conti converted his stock to shares in Bell Atlantic Corp. Two 2-for-1 stock splits later, his shares had grown to 76.

“I started getting these proxy statements and, reading them, I began to recognize all these goody bags for the chairman and the board and all the executives,” he says.

“The flaw I saw in it is that these people were setting their own compensation, and when you do that there’s no limit. The point is, who objectively determines what criteria for (determining executive pay) is proper?”

So in 1988, Conti insisted he and other Bell Atlantic stockholders be allowed to vote on how much Bell Atlantic’s chairman, Raymond Smith, should make. Specifically, he wanted a proxy vote on $4.2 million the company kept as a bonus pool for top executives.

Time after time, the company and federal regulators shrugged him off.

As the economy weakened and more workers lost their jobs, public sentiment gradually swung their way. The SEC sensed the grass-roots outrage at reports that Time-Warner Chairman Steven J. Ross received more than $78 million in 1990, that Heinz Chairman Anthony O’Reilly made $75 million last year, that Coca-Cola chief Roberto Goizueta got stock worth about $81 million in 1991.

The United Shareholders Association calculated that while corporate profits dropped by 7 last year, pay for top executives rose by 7.

Frank Kelly, a SEC spokesman, says Conti is among scores of small investors who have steadily petitioned the agency over the years to give shareholders a voice against lavish pay. “It wasn’t an issue 20 years ago because people didn’t make this kind of money,” Kelly says.

In sheer numbers, the shares held by small investors such as Conti are negligible compared to those held by pension funds, banks or insurance companies. But now Bell Atlantic, IBM, Eastman Kodak, Chrysler and other big companies must hear out the small investor.

“There’s no stopping this issue now,” says Gray Davis, California state controller and vice chairman of the Washington, D.C.-based Council of Institutional Investors.

“Already CEOs are starting to hear footsteps. There have been six or seven cases already where CEOs have voluntarily reduced their pay and incentive packages for one reason or another.”

Conti’s next stand against Bell Atlantic is a proposal he wants shareholders to adopt at their annual meeting April 28 in Richmond, Va. It asserts that $628,600 is sufficient for the chairman and chief executive, that the board not be allowed to set its own pay, and that the board halt stock option plans for senior executives.

Conti knows his votes won’t have much sway against the millions of shares held by such institutional investors as banks and big investment firms.

He shrugs. “Half a loaf is better than no bread.”