The measure, defeated by a 65% to 35% margin, was proposed by TIAA-CREF, the $262 billion pension system. Under the plan, stock-based compensation would have been linked to performance hurdles or indexing features, according to a news release.
TIAA-CREF said by exposing executive compensation to downside financial risk, it would have better aligned shareholder with management risk. In filing its proposal, TIAA-CREF noted that in 2001 SBC Chairman and CEO Edward Whiteacre, Jr was granted stock options with an estimated present value of $43.6 million.
However, TIAA-CREF is looking at the glass as half-full. “We are very pleased that a large portion of SBC shareholders recognized that mega grants of fixed-price stock options are not in their interest,” said Peter Clapman, senior vice president and chief counsel of corporate governance for TIAA-CREF. TIAA-CREF has a similar measure on the ballot at Siebel Systems, Inc, where the annual meeting will be held in June.