Pay Disparity

2004 – Compuware Corporation

 

 

WHEREAS:

 

U.S. CEO compensation is often excessive (1) and often tempts CEOs to undertake self-serving ventures (2) and often degrades long-term stock performance.(3)  The ratio of average CEO pay to average-worker pay has skyrocketed from about 40 in 1980 to at least several hundred currently.(4)  

 

MetLife appears to be part of this national problem.  A study shows the Company’s 2002 CEO compensation to be 722 times the pay of an average U.S. worker. (5)

 

We believe that the system for compensating CEOs would markedly improve if companies would take three steps.  First, restore a reasonable relationship to average-worker pay.  Second, include company stock or options in the CEO’s compensation only if the company provides that same type of compensation to all fulltime workers on a basis that would avoid increasing the pay gap. Third, link CEO compensation to meeting specific performance requirements that would mainly reflect the contributions of the CEO rather than of the work force or the economy in general.

 

In our opinion, a huge CEO-to-worker pay gap not only degrades worker and therefore company performance but also violates the dignity and worth of every human being that is the foundation of Catholic social teaching and common moral principles.

 

RESOLVED: The shareholders urge the Board of Directors:

 

·         To limit the Compensation paid to the CEO in any fiscal year to no more than 100 times the average Compensation paid to the company’s Non-Managerial Workers in the prior fiscal year, unless the shareholders have approved paying the CEO a greater amount;

 

·         In any proposal for shareholder approval, to provide that the CEO can receive more than the 100-times amount only if the company achieves one or more goals that would mainly reflect the CEO’s contributions; and

 

·         In that proposal, to provide for grants to the CEO of stock options or other equity only if the company provides equity compensation to all fulltime employees such that they would participate proportionately in stock performance.

 

“Compensation” means salary, bonus, the grant-date present value of stock options, the grant-date present value of restricted stock, payments under long-term incentive plans, and “other annual” and “all other compensation” as those categories are defined for proxy statement purposes.

 

“Non-Managerial Workers” means those employees of the company worldwide whose work would put them into the categories of Blue-Collar Occupations or Service Occupations or the Sales and Administrative Support components of White-Collar Occupations as used by the Bureau of Labor Statistics in its National Compensation Surveys.

 

Notes:

 

  1. Conference Board, 9/17/02 (quoting Greenspan: “infectious greed”), Business Week 4/22/02 (“simply out of hand”).
  2. Edward M. Welch, “Justice In Executive Compensation”, America 5/19/03.
  3. Graef Crystal, Bloomberg 8/13/03 (“high pay destroys high performance”).
  4. Economist.com, Executive Pay, 10/9/03
  5. AFL/CIO Executive Paywatch, www.aflcio.org

 

Sponsors:

Lead: Catholic Equity Fund, Theodore Zimmer President; Christus Health