Shareholders voiced their displeasure with governance and performance at Staples Inc.,SPLS +1.92% voting to reject the office supply retailer’s executive pay practices and narrowly backing a call for an independent chairman.
The resolution backing an independent board chairman won 51% of the vote, while the company’s executive pay practices were rebuked 54% to 46%.
Neither vote was binding, and the company’s stock incentive plan was easily passed in a separate vote. But they indicate investor unease with executive pay at a company that has struggled for several years with online competition and a weak recovery.
A Staples spokesman said the company takes shareholder input very seriously.
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“The Board of Directors will take these results into consideration as it continues to work to build value for all shareholders,” spokesman Kirk Saville said in an email.
Influential proxy adviser Institutional Shareholder Services Inc. last month criticized Staples’ compensation plan for changing the metrics that determined executives’ bonuses and long-term incentive awards. Staples said the new pay plan was needed to recognize executives’ growing workloads as the company attempts a turnaround.
Chairman and Chief Executive Ron Sargent’s compensation totaled $10.8 million last year.
Glass Lewis & Co., another advisory firm, joined ISS by suggesting the company appoint separate executives to hold its CEO and chairman posts. Mr. Sargent became CEO in 2002 and took over the chairmanship in 2005.
Date: June 2, 2014