Investors, executives to discuss CEO pay

About 20 large investors and company officials will meet today as the first step in a campaign by shareholders to gain a bigger voice on setting compensation for U.S. company executives.

Corporate governance groups and public-sector pension funds have won major victories since Enron and WorldCom collapsed six years ago. A growing number of companies have agreed to annual elections of directors and other rules to make executives more accountable to investors.

Representatives from the American Federation of State, County and Municipal Employees, Walden Asset Management, Pfizer Inc. and others will meet at the New York offices of pension fund giant TIAA-CREF to discuss shareholder advisory votes on executive compensation. About 10 companies and 10 investment groups with $1 trillion in assets will be in the room.

The recent windfall severance payment to former Home Depot Inc. Chief Executive Robert Nardelli, who was ousted after years of poor performance, has sparked wide interest in executive pay packages and the boards that approve them.

At the same time, Democratic leaders in Congress plan to hold hearings and the Securities and Exchange Commission has forced greater disclosure of compensation.

Activist shareholders have faced stiff opposition from corporate groups such as the U.S. Chamber of Commerce that worry that direct access could be disruptive.

But pension funds and other shareholders simply want greater accountability, Richard Ferlauto, director of pension and benefit policy for the public workers’ federation, said at a New York Society of Security Analysts corporate governance conference Thursday.

“We have a system that’s broken,” Ferlauto said. “We have overblown executive pay that is picking the pockets of investors.”