SHAREHOLDERS STARTING TO USE THE POWER OF THE VOTE

Most business students are surprised to learn that shareholders have very little power in most publicly traded companies. They aren't allowed to dictate CEO or other executive pay, they aren't allowed to nominate their own board candidates in many cases, and there is little they can do to stop boards that are too cozy with executives from creating severance packages that are far too generous (see Nardelli at Home Depot and McKinnell at Pfizer). This might be the year that some of that changes. USA Today reports that shareholders are prepared to flex their muscles this year and possibly make big changes shaking up the corporate landscape. On their radar:

1. Being allowed to nominate their own slate of board candidates, not merely vote for the slate put forward by the company.
2. Being allowed to vote for executive compensation in a non-binding manner, as is required in the United Kingdom.
3. Requiring more than 50% of the vote to be elected to the board. Currently, in many companies, unopposed directors can be elected with a tiny percentage of the vote.
4. Getting more of a say in global warming issues. There are 42 global-warming-related resolutions up for vote this year.