The reform proposal, a bylaws amendment, seeks to make annual shareholder approval a requirement before MONY could award executive compensation in excess of Internal Revenue Service deductibility limits , according to a news release.
Currently, the Internal Revenue Code generally limits the deductibility of top executives’ compensation packages to no more than $1 million per year, not including “performance-based” compensation such as long-term performance plans or incentive stock options. Within these regulations, MONY discloses only broad categories of “business criteria” associated with the plan, but not the specific performance goals.
However, if the bylaw amendment receives the necessary votes, MONY would be required to disclose the specific performance goals adopted by directors to measure executive performance under the long- term performance plan. Further, MONY would be required to report the fair market value of executive stock options as an expense in its financial statements, if management intended to use options to exceed the compensation limits imposed by the proposal.
PACE announced the reform effort after the Securities and Exchange Commission’s (SEC) Division of Corporation Finance refused MONY’s bid to omit the shareholder proposal from management’s proxy statement. The reform proposal can be viewed at www.reformMONYnow.org .
PACE represents over 320,000 workers in the paper, automotive parts, chemical, oil, industrial minerals, cement, atomic energy and grain-milling industries in the United States and Canada.