Sixty-one percent of the New York City-based company’s shareholders voted in favor of yearly director elections in an effort to exert more influence over corporate policies. Currently, Morgan Stanley’s practice is to place approximately one-third of the company’s 11 directors on the ballot each year, according to a Dow Jones report.
If recent history is any indication however, passage of the nonbonding resolution though does not look to gain much traction for the corporate decision makers. Morgan Stanley ignored a vote last year from about 58% of its shareholders to change its staggered election rule. In 2002, the investment bank was urged by 63% of shareholders to adopt annual elections for all directors.
Morgan Stanley Chairman and Chief Executive Philip Purcell said“the board will take an active look,” at eliminating staggered terms and discuss her proposal with institutional investors.
Morgan Stanley’s shareholders are not alone. Shareholders at Goldman Sachs Group Inc earlier this month approved an annual election proposal. Goldman said its board will give consideration to changing its policies. Also the U.S. Securities and Exchange Commission (SEC) has proposed making it easier for shareholders to nominate directors, a process opposed by most corporate executives.
Separately, shareholders defeated a proposal to make all “golden parachute” pay packages for executives subject to shareholder approval.