KB Home investors reject union proposal for exec pay
KB Home shareholders rejected a labor union proposal to tie executive pay to company performance and approved a measure to limit severance payments.
The decision on executive pay was a victory for the Westwood-based builder, which came under fire for giving a multimillion-dollar pay package to its chief executive last year after the stock had fallen by more than half. The votes were taken at KB Home’s annual shareholder meeting Thursday and confirmed by company spokeswoman Lindsay Stephenson.
The Laborers’ International Union of North America, which has about 500,000 members, backed a proposal by the Massachusetts Laborers Pension Fund to tie executive pay to company performance and to set pay targets at or below the median at similar companies. KB Home asked investors to vote against the plan, saying it would impair the company’s ability to retain talent.
The union said builders including KB Home contributed to the housing and mortgage crisis by urging buyers to use sub-prime loans offered by their mortgage units. Sub-prime lending at KB Home grew more than fivefold from 2005 to 2006, the union said.
During KB Home’s annual shareholder meeting, construction-union workers wearing pink pig suits protested outside the company’s headquarters on Wilshire Boulevard. They said the builder shouldn’t have encouraged buyers to use sub-prime loans or given CEO Jeffrey T. Mezger a $6-million bonus last year.