A news release from the Service Employees International Union (SEIU) said the campaign focuses on pay that “may have been tied to poorly understood derivatives and other financial instruments that are now worthless.”
The union is waging the executive pay fight through its SEIU Master Trust, which has total assets of more than $1.3 billion. The union hired the Grant & Eisenhofer law firm to prepare and write letters to the company boards and monitor responses.
“It’s bad for shareholders and dangerous for our economy when executives profit off of complex derivatives and inflated stocks,” said SEIU President and SEIU Master Trust Chair Andy Stern, in the news release. “The collective choices of top executives to reward themselves despite their failure to deliver a profit on their investments have driven stock prices into the ground, negatively impacted our pension funds, and left our economy in shambles.”
In the letters from the law firm, the union said it argues that corporate compensation payments based on false economic metrics may be recouped, based on U.S. law. The letters further demand that the companies’ boards overhaul their executive compensation structure so top executives do not receive bonuses and other incentivized pay rewards regardless of the companies’ performance.
Since 2005, the top five most highly paid executives at the 29 firms received a total of more than $3.5 billion in cash and equity pay and over $1.5 billion in stock options, the union claimed.
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