CEO Pay Hikes Sail Through Shareholder Votes: Interactive Graphic

Muscular displays of shareholder dissent can bring about big changes, but they are few and far between.

In three years of “say-on-pay” votes since the Dodd-Frank Act made them universal, investors have widely acquiesced to double-digit increases in executive pay. For a group of 125 banks considered here, 70% secured approval of compensation plans from at least 90% of shares voted during annual meetings in 2011, and 79% in 2012. Among those for which 2013 results are available, 74% have secured approval from at least 90% of shares voted. (See the following graphic, which will be updated as this year’s annual meetings continue. This article was written based on data available at May 8. Text continues below.)

Just two say-on-pay votes, where shareholders give nonbinding verdicts on compensation for top executives, failed to secure majority support in 2011 and 2012 combined among the 125 banks. None have failed to secure a majority so far in 2013.

During this year’s proxy season, the possibility that shareholders will demand to strip JPMorgan Chase (JPM) CEO Jamie Dimon of the chairmanship has taken center stage amid a broader vigil over what might tip the company toward breakup in the wake of errant derivatives trades and pressure over the economic risk posed by huge banks. The London Whale disaster could also cost directors on JPMorgan Chase’s risk policy committee their positions.

(The Dodd-Frank Act requires that all publicly traded companies conduct say-on-pay votes, though they may be held as infrequently as once every three years. Say-on-pay votes had previously been required for banks that received Tarp assistance.)

A rejection at Citigroup (NYSE: C) in 2012 was a watershed in that year’s proxy season, however, and an important event on the way to the ouster of former chief executive Vikram Pandit in October. At its annual meeting in April this year, Citi’s executive pay plan won support from 91% of shares. The company said it had conferred with investors and instituted reforms, and its proxy statement highlighted that Pandit lost about $27 million in unvested stock retention awards upon his departure. The size of those awards had been a major bone of contention.

Among the 125 banks considered here, about half have chief executives who also serve as chairmen. Votes on splitting the jobs of chairmen and CEOs have been held at American Express (AXP), U.S. Bancorp (USB) and Wells Fargo (WFC). The proposals received support from about a fifth of shares voted in each case.

Like Citi, banks that fared poorly in say-on-pay votes have frequently recovered. Pay packages at Umpqua (UMPQ), for instance, were supported by between 95% and 98% of shares in 2012 and 2013, compared with just 35% in 2011. Typically, rehabilitation involves outreach to institutional investors, who vote shares on behalf of mutual fund owners and pensioners. (The role of institutional investors, which may not always have the same agenda as long-term shareholders, may be one reason for widespread assent for board positions in proxy votes.)

Other banks have skated by with lukewarm support, however. Say-on-pay approval at TCF Financial (TCB), for instance, peaked at 76% in 2012 over the last three years, and fell to 61% in April. William Cooper, the company’s chief executive, took a 30% pay cut in 2012, but that followed a threefold jump in 2011, and his compensation ranks among the highest for banks with less than $20 billion of assets.