Shareholders, SEC Continue to Press Companies on Options

Shareholder proposals to link options to performance and to require companies to expense them continue to gain momentum. The Investor Responsibility Research Center recently reported that 319 shareholder proposals have been filed on executive pay this year, up from 106 last year. Most ask that options be treated as an expense and that the formulas for granting them to executives be changed. There have been 26 proposals submitted to GE alone, including one from CALPERS, the California pension system, to limit GE executives to performance-based options. Meanwhile, the Securities and Exchange Commission staff has told Fluor Corporation that it cannot exclude a shareholder proposal that all future executive options be performance-based.