By a 3-2 vote, the SEC gave final approval to a New York Stock Exchange rule change to bar brokers from casting uninstructed client shares in uncontested director elections starting in 2010.

The rule approval was praised by advocates for institutional investors, which have lobbied for a ban on “broker votes” for more than a decade. However, the SEC’s two Republican commissioners warned that the new rule could diminish the influence of retail shareholders, increase the number of directors who lose their seats each their year, and impose additional costs on issuers.

Also on July 1, the SEC unanimously voted to propose new rules that seek more information on compensation risks, other services performed by pay consultants, director qualifications, and board leadership structures. The disclosure proposals also include a new mandate that companies disclose proxy vote results in an 8-K filing within four business days of an annual meeting, instead of up to several months later in a quarterly filing. The commission also voted to issue draft rules that address the annual advisory vote on pay requirement that now applies to financial firms that receive support under the Troubled Asset Relief Program (TARP). Both rule proposals will be subject to a 60-day comment period, and SEC officials hope to have final rules in place before the 2010 proxy season.

Also today, the SEC unanimously voted to propose new rules that seek more information on compensation risks, director qualifications, and board leadership structures. In a pleasant surprise for investor activists, the disclosure proposals also include a new mandate that companies disclose proxy vote results in an 8-K filing within four business days of an annual meeting, instead of several months later in a quarterly filing. The commission also voted to issue draft rules that codify the annual advisory vote on pay requirement that now applies to federally supported financial firms. Both rule proposals will be subject to a 60-day comment period.

The “broker vote” rule change, which takes affect on Jan. 1, 2010, will apply to all NYSE-listed issuers, except for registered investment companies. The rule change, which was backed by many institutional investors, may lead to a significant increase in the number of directors who fail to win majority support in the face of shareholder “vote no” campaigns.

Commissioners Troy Paredes and Kathleen Casey voted against the rule change. They warned that the amendment to NYSE Rule 452 could diminish the influence of retail investors while increasing the power of institutional shareholders. They also said that the SEC should have moved first to address other “proxy plumbing” issues, such as the shareholder communication rules and the problems of “empty” and “over voting.”

While noting the concerns raised by issuers and the commissioners who urged delay of the rule change, SEC chair Mary Schapiro recalled that the rule was first drafted three years ago by a NYSE proxy working group with a “widely diverse” membership. “Keeping hard decisions on hold for many years doesn’t solve any problems. It’s time to move forward,” Schapiro said.

Schapiro called on the SEC staff to start work on developing regulatory proposals to address other proxy voting issues. However, any such rules won’t be proposed and finalized in time for the 2010 proxy season. SEC staff members said the commission may hold a roundtable on these issues in October or November.

Schapiro also urged the agency staff to work with the NYSE and issuers on new efforts to educate investors about proxy voting in the absence of broker votes.

For more details on today’s agenda items, click here.

The vote at the company’s June 25 annual meeting is the 19th majority result for a “say on pay” proposal at a U.S. company this year, according to RiskMetrics Group data. Pay vote resolutions have averaged 46.7 percent support so far this season, up from 42 percent in 2008.

The proposal was filed by Denver-based shareholder activist Gerald Armstrong. Supervalu did not release detailed preliminary vote results, according to news reports.

Pay vote proponents say they hope that the greater support received by advisory vote resolutions this year will spur Congress to mandate pay votes at all U.S. companies.

The NYSE has proposed to amend exchange Rule 452 to remove uncontested director elections from the list of routine matters where brokers can vote client shares if they don’t receive voting instructions within 10 days before an annual meeting. Most activist investors support the rule change and argue that these discretionary broker votes, which typically are cast for management nominees, can dampen the impact of “vote no” campaigns. For instance, labor investors contend that two Citigroup directors would not have received majority support at the company’s April 21 meeting without the help of broker votes.

According to the agenda for the SEC meeting, the commission also will discuss whether to propose new disclosure rules on corporate governance and compensation matters. SEC Chairman Mary Schapiro has called for companies to provide more disclosure on director qualifications and the firm’s reasons for selecting its board leadership structure.

The agenda also includes a discussion of proposed rules for advisory votes on compensation at federally supported financial institutions.

While the administration did not go far as some market observers had expected, the president’s proposals would significantly expand the authority of the Securities and Exchange Commission and other regulators.

The proposals, many of which require Congressional approval, include giving the Federal Reserve more authority to oversee bank holding companies and non-bank firms, the creation of a new Financial Services Oversight Council to identify emerging systemic risks, and the establishment of a new Consumer Financial Protection Agency to regulate mortgages and other financial products.

To reduce risks to the financial system, “large, interconnected” financial firms identified as “Tier 1 financial holding companies” would be subject “to more stringent capital, activities, and liquidity standards, and more exacting prudential supervision,” according to a White House summary of the proposals.

The president also called for requiring hedge fund advisers to register with the SEC and for “comprehensive regulation” of all over-the-counter derivatives, including credit default swaps. Originators of securitized products would be required to retain a 5 percent stake.

The White House also said the SEC should “continue its efforts to tighten the regulation of credit rating agencies” and “ensure that firms have robust policies and procedures that manage and disclose conflicts of interest.”

The administration did not propose to combine the SEC and the Commodity Futures Trading Commission (CFTC), as some agency officials had endorsed. However, the administration did direct the two agencies to prepare a report by Sept. 30 with their recommendations to Congress on harmonizing their regulation of similar financial instruments.

Recalling the role that short-term incentives and other compensation practices played in causing the global financial crisis, the White House highlighted several principles and reforms that were announced by the Treasury Department on June 10. “Executive compensation--unmoored from long-term performance or even reality--rewarded recklessness rather than responsibility,” the president said in his speech today.

“Federal regulators should issue standards and guidelines to better align executive compensation practices of financial firms with long-term shareholder value and to prevent compensation practices from providing incentives that could threaten the safety and soundness of supervised institutions,” the White House said in its regulatory reform report.

The administration reiterated its support for “say on pay” legislation to require public companies to offer an annual non-binding vote on the compensation for senior executives. “While such votes are non-binding, they provide a strong message to management and boards and serve to support a culture of performance, transparency, and accountability in executive compensation,” the White House noted.

The Obama administration again said it would support legislation to enhance the independence and authority of compensation committees.

RiskMetrics undertakes an extensive policy formulation process each year that includes a broad-based global survey, issue and market-specific roundtables and an open comment period. During the process, clients and various industry constituents are encouraged to offer their views on leading governance issues likely to dominate the upcoming proxy season. RiskMetrics then formulates its proxy voting policies to reflect the collective thinking of its institutional investor clients, enriched by its own knowledge and expertise.

The survey period is open through July 31 and will be followed in October by an open comment period after RiskMetrics publishes its draft policies. The open comment period is designed to elicit objective, specific feedback from investors, corporate issuers and industry constituents on the practical implementation of proposed policies. Feedback received during the open comment period will be made available via RiskMetrics’ online Policy Gateway.

To learn more about RiskMetrics Group’s policy formulation process, please visit here..

Other provisions of Peters’ bill, “The Shareholder Empowerment Act of 2009,” are similar to those in legislation introduced in late May by a fellow Democrat, Senator Charles Schumer of New York. Both Peters and Schumer call for U.S. public companies to hold annual advisory votes on executive pay, allow shareholders to nominate board candidates to appear on management proxy statements, adopt a majority vote standard in uncontested director elections, and appoint an independent chairman.

“As an investment advisor for over 20 years, shareholder rights issues have always been very important to me,” Peters said in a press release. “This bill empowers shareholders, a company’s true owners. Wall Street executives who pursued reckless investment strategies were a major contributing factor to the recent financial meltdown. Ensuring that executives act in investors’ long-term interest rather than for their own short-term gain is critical to prevent a similar economic collapse in the future.”

Peters’ bill, H.R. 2861, goes farther than Schumer’s by calling for the elimination of uninstructed “broker” votes in board elections. The SEC is considering a New York Stock Exchange rule change on this topic, but it’s not known when the commission will act.

In addition, Peters’ bill would prohibit advisors to compensation committees from also performing work for management. This would be a significant change. Companies now must disclose whether their compensation panel uses a consultant, but issuers do not have to provide details on the fees paid to the advisor or the fees earned for doing other more-lucrative work for management, such as human resources consulting.

Seeking to “curb excessive risk-taking,” Peters’ legislation also would require companies to inform shareholders about the performance targets used to determine bonuses and other incentives. While some U.S. companies are providing better disclosure of performance targets, others have resisted, citing competitive reasons.

His bill also would require companies to adopt “claw-back” policies and prohibit severance payments to executives who are terminated for “poor” performance.

It’s unclear whether his bill has a realistic chance of passage. Peters is serving in his first-term in the House of Representatives, where legislative agendas are controlled by senior Democrats. So far, six other representatives--including two veteran Democratic lawmakers, Reps. John Dingell of Michigan and Maxine Waters of California--have signed up as co-sponsors.

Peters’ district includes parts of suburban Detroit and is home to Chrysler’s headquarters and three General Motors plants. He is a member of the House Financial Services Committee, which oversees the SEC and investor issues. Before joining Congress in January, he served as a state lawmaker, Michigan’s lottery commissioner, and a city councilman.

“By failing to accept the resignations tendered by these directors, each of whom failed to receive a majority of votes cast in the company’s May 14 director election, the board violated the most fundamental corporate governance principle and reinforced investor concerns with the board at a sensitive moment,” William Patterson, executive director of CtW, wrote in a June 9 letter to David McCammon, Pulte’s lead independent director.

CtW, the investment arm of the Change to Win labor federation, said the vote was, “an extraordinary rebuke” given the company’s high inside ownership. (Executives and directors owned a 19.5 percent stake as of March 17.) The labor investment group estimates (based on past turnout and without counting uninstructed “broker” votes) that at least 76 percent of outside investors voted against the three directors. The Laborers’ International Union of North America, in a June 2 letter, also has called on Pulte’s board to reconsider its decision.

In a June 2 filing, the Michigan-based homebuilder said the governance committee considered the issue at a May 29 meeting and that the full board (with the three directors recusing themselves) voted unanimously not to accept the resignations. Pulte, which has a resignation policy in its governance guidelines, maintains a plurality voting standard. The board concluded that the resignations were a reflection of the company’s classified board structure and its adoption of a “poison pill” plan in March. Shareholders gave majority support to declassification proposals this year, in 2008, and in 2007.

The board said it recommended allowing shareholders to vote in 2010 on the pill as well as a charter amendment to start phasing out its classified board in 2011. The board delayed a final decision on these governance matters until it completes a merger with Centex.

CtW said it was not satisfied by the board’s recent actions. “Rather than address shareholders’ objection to weak and unresponsive directors, the board is belatedly taking up specific governance failures that are themselves symptoms of an entrenched board,” Patterson wrote in his letter.

It’s extremely rare for a director at an S&P 500 firm like Pulte to receive majority opposition in an uncontested board election. That happened at two S&P 500 companies (Cameron International and Boston Properties) in 2008, according to RiskMetrics Group data.

So far this year, directors at four smaller companies--Zoll Medical, NBTY, Digi International, and Plexus--have encountered majority opposition, according to RiskMetrics data. It is likely that directors at other smaller issuers also failed to receive majority support this season, but that information won’t be public until August when many companies with second-quarter meeting dates file their 10-Q reports with final vote results. Most Russell 3,000 companies don’t have director resignation policies or majority vote bylaws, so they are not likely to disclose a majority withhold vote until their 10-Q filing.

“Companies should seek to pay top executives in ways that are tightly aligned with the long-term value and soundness of the firm,” Treasury Secretary Timothy Geithner said in a statement.

According to the Treasury Department’s summary of the proposed “say on pay” bill, shareholders would have the right to vote on the annual compensation for a company’s top five named executive officers. That vote would be based on the pay described in the “Compensation Disclosure & Analysis” section of the company’s proxy statement, including “salary, bonus, stock awards, option awards, non-equity incentive plan compensation, change in pension value and non-qualified deferred compensation earnings, all other compensation, and total compensation amount,” according to the department. Companies also would be required to submit “golden parachute” arrangements to a separate shareholder vote when seeking approval for mergers, acquisitions, or other change in-control transactions.

In an apparent recognition of the different approaches that U.S. issuers have taken in holding advisory votes so far, the Treasury Department said companies “will have the opportunity to ask shareholders’ views on specific compensation decisions, including decisions related to various aspects or categories of pay.” The Treasury Department’s summary does not indicate when the advisory vote mandate would first take effect.

After meeting today with Securities and Exchange Commission Chair Mary Schapiro and Federal Reserve Governor Daniel Tarullo, Geithner emphasized that the administration would not seek to impose caps on compensation. While Obama’s support for advisory votes is not new, today marked the first time that the Treasury Department has formally called for imposing advisory votes on all U.S. public companies.

In another new development, Geither also called for legislation to give the SEC “the power to ensure that compensation committees are more independent, adhering to standards similar to those in place for audit committees as part of the Sarbanes-Oxley Act.” He also said that pay panels “would be given the responsibility and the resources to hire their own independent compensation consultants and outside counsel.” The bill, according to a Treasury summary, also would direct the SEC to establish standards “for ensuring the independence of compensation consultants and outside counsel used by the compensation committee.”

The prospects for the pay-vote legislation would appear to be good; the main question is whether such a bill could be passed by both chambers of Congress and implemented by the SEC in time to mandate pay votes during the 2010 proxy season.

The House of Representatives passed similar advisory vote legislation in 2007, but a companion Senate bill, which was introduced by then-Senator Obama, stalled. Since last September, the Senate has shown more interest in pay-reform legislation. In February, Senator Christopher Dodd, who chairs the Senate Banking Committee, inserted into the economic stimulus bill an advisory vote mandate for the several hundred financial firms that received federal bailout funds.

In addition to the financial firms, 23 companies have voluntarily agreed to hold annual pay votes, according to RiskMetrics Group data. Most of the firms took that step in response to majority-supported shareholder proposals.

* What are the prospects of the Securities and Exchange Commission creating a single, universal ballot for corporate elections?

* Are we headed in the direction of federal preemption of state corporation law?

* Have director elections eclipsed shareholder proposals as the primary vehicle for shareholder activism?

* How might the loss of broker non-votes impact the 2010 proxy season?

Speakers Part One: 1:00 PM - 1:30 PM EDT, 2009 Proxy Season Trends
* Pat McGurn, Special Counsel, RiskMetrics Group
* Subodh Mishra, Governance Institute, RiskMetrics Group
* Valerie Ho, Compensation Research, RiskMetrics Group

Speakers Part Two: 1:30 PM to 2:15 PM EDT, Looking Ahead
* Richard H. Koppes, Of Counsel, Jones Day
* Broc Romanek, Editor, TheCorporateCounsel.net
* Ed Durkin, Corporate Affairs Director, United Brotherhood of Carpenters and Joiners of America

To register for the webcast, please visit here. To learn more about Governance Exchange, please visit here.

The settlement is the largest obtained by shareholders through European legal proceedings and is the first to include investors from across the Continent, according to Grant & Eisenhofer, a Delaware-based law firm that represented the investors. The settlement includes Dutch pension giant Stichting Pensioenfonds ABP and more than 150 pension funds from 17 European nations, plus Canada and Australia, that bought Shell shares outside the United States from April 8, 1999, to March 18, 2004.

“We are pleased that the Amsterdam Court of Appeals has issued its final approval on this historic settlement, which represents a watershed outcome for European and other non-U.S. investors in gaining substantial, collective recovery in one of the most high-profile securities cases in recent years,” Jay Eisenhofer, co-managing partner of Grant & Eisenhofer, said in a press release.

“It is important that investors have a proper mechanism and forum for pursuing securities claims in European courts--the Amsterdam Court of Appeals has done a tremendous service for advancing shareholder rights in its handling of the Shell case,” Eisenhofer said. “This was a uniquely European resolution in the context of a securities fraud, but one that can present huge implications in other disputes going forward.”

The investors sued after Shell reduced its oil and gas reserve estimates by more than 33 percent in early 2004, which prompted the company’s shares to fall.

Separately, U.S. investors obtained an $89.5 million settlement from Shell. That accord, which was approved by a federal judge in New Jersey in September 2008, included PricewaterhouseCoopers and KPMG Accountants N.V. as defendants. The claims by the foreign pension funds that bought Shell stock from non-U.S. exchanges were dismissed from the U.S. proceedings. The U.S. Securities and Exchange Commission also obtained a $120 million settlement from Shell.

The proposal at Fort Worth, Texas-based XTO was filed by TIAA-CREF’s College Retirement Equity Fund. Other recent “say on pay” results include 53.5 percent support at Pulte Homes, 49.6 percent at Frontier Communications, 47.5 percent at Colgate-Palmolive, and 46.5 percent at Allstate, according to proponents. A pay vote proposal also received 47 percent support at Altria, up from 37.1 percent in 2008, proponents said. The worst showing so far was a 12.6 percent vote at Ford Motor; the automaker has a dual-class equity structure that gives the Ford family 40 percent of the voting power.

Overall, pay vote proposals have averaged 46.6 percent support this year at the 44 meetings where preliminary or final results are available, according to RiskMetrics data. These results are based on the votes cast “for” and “against” and don’t include abstentions.

Also at XTO’s May 19 annual meeting, there was 49 percent support for a proposal that seeks shareholder approval of future executive death benefits, according to the proponent, the Amalgamated Bank’s LongView fund. According to the company’s proxy statement, the heirs of CEO Bob Simpson are slated to receive a $144 million package, but XTO has negotiated a new employment agreement that would reduce those benefits by $60 million after June 1.

By a 3-2 margin, SEC Chair Mary Schapiro and the commission’s two Democrats voted for the access proposal, which sets ownership requirements on a sliding scale of 1 to 5 percent, based on market capitalization. This marketwide “direct access” rule, along with a concurrent proposal to lift the SEC ban on shareholder access resolutions, is a major reversal for the commission, which voted in 2007 to prohibit investor access proposals.

“I believe that the most effective means of providing accountability--in a way that is both cost effective and timely--is to ensure that shareholders have a meaningful opportunity to effectuate the rights that they already have under state law to nominate directors,” Schapiro said at the meeting. “The time has come to resolve this debate,” she said, recalling the access rules proposed in 2003 and 2007 and the numerous SEC roundtables held on proxy issues.

Activist investors hailed the proposed Rule 14a-11, which will be subject to a 60-day public comment period after it is published in the Federal Register. SEC officials said they hope to get a final rule approved before the 2010 proxy season, although the measure may be delayed by a potential court challenge.

“This is a great day for shareowners,” Ann Yerger, executive director of the Council of Institutional Investors, said in a press release. “Access to the proxy would invigorate board elections and make boards more responsive to shareowners, more thoughtful about whom they nominate to serve as directors, and more vigilant in their oversight of companies.”

Richard Ferlauto, director of corporate governance for the American Federation of State, County, and Municipal Employees (AFSCME), said the rule is “a very significant step forward for investor rights.”

The SEC’s two Republican commissioners, Kathleen Casey and Troy Paredes, both voted against the access proposal. They expressed concern that the proposed rule would override shareholder-approved or board-approved access bylaws that set higher ownership thresholds or longer ownership periods.

David Hirschmann of the U.S. Chamber of Commerce said the access rule is “a step in the wrong direction.” The SEC proposal is “a gift for activist investors and will weaken corporate governance and harm investors,” Hirschmann said in a press release.

The draft rule would impose a sliding ownership threshold based on market capitalization (or net assets in the case of investment companies) that reflects existing SEC classifications for companies. For “large accelerated filers,” or those with more than $700 million in worldwide market value, the minimum ownership percentage would be 1 percent of the voting securities. At “accelerated filers” (firms with a worldwide market value of at least $75 million but less than $700 million), the threshold would be 3 percent. At “non-accelerated filers” (companies with less than $75 million in market value), the threshold would be 5 percent. Investors would be allowed to aggregate their holdings to meet these ownership requirements.

Notably, the draft rule would impose a one-year minimum ownership period, which is less than the two-year requirement that has been backed by AFSCME and the Council of Institutional Investors and can be found in existing corporate bylaws (e.g., at Comverse Technology).

The draft rule would permit investors to nominate candidates for up to 25 percent of the board. In the event that the nominees from multiple investor groups exceeded this cap, the first filer would have priority, SEC officials said.

The SEC proposal also would revise Rule 14a-8(i)(8)’s “election” exclusion and restore the ability of shareholders to file resolutions to amend a corporation's governing documents to address nomination procedures or disclosure provisions, provided that the proposal does not conflict with the commission’s proposed Rule 14a-11. Unlike the access rules drafted in 2003 and 2007, the latest SEC proposal would impose no additional ownership hurdles beyond those required to file regular shareholder resolutions (i.e., holding a $2,000 stake for at least one year before submitting a proposal.)

Governance experts say that the Rule 14a-8(i)(8) amendment appears to be a fall-back provision in the event that a court delays or invalidates the direct access portion of the SEC’s proposal. A legal challenge from access opponents presumably would be based on the argument that the SEC’s mandate to regulate corporate proxy disclosures does not give it the authority to regulate director elections governed by state laws. Any such lawsuit would be heard by the U.S. Court of Appeals for the D.C. Circuit, which invalidated SEC rules on mutual fund independence and hedge fund registration earlier this decade.

While the Business Roundtable and other corporate advocates are mobilizing against the bill, investor advocates praised its provisions. The Council of Institutional Investors, the California Public Employees’ Retirement System, and the American Federation of State, County, and Municipal Employees quickly endorsed the bill.

“We believe that stronger investor oversight is critically needed to restore trust and confidence in the integrity of the U.S. capital markets,” Joe Dear, CalPERS’ chief investment officer, said in a letter to Schumer. “Your legislation will enhance our ability to be active and prudent shareowners.”

Advisory Votes: The legislation specifically requires issuers to hold a separate advisory vote at every shareholder meeting where executive compensation disclosure is required. This requirement would apply to proxy statements issued more than one year after the effective date of the legislation. (In other words, it appears that pay votes would not become mandatory across the U.S. market until the 2011 proxy season at the earliest.) The bill makes clear that the votes are non-binding, would not overrule board decisions, and would not “create or imply any change in the current fiduciary duties” of boards. Anticipating potential no-action challenges from issuers, the bill states that the advisory vote provision should not be construed to restrict or limit the ability of shareholders file compensation-related proposals. The bill also calls for a separate vote on “golden parachute” compensation arrangements to accompany shareholder votes on mergers, acquisitions, or sales of substantially all of an issuer’s assets.

Proxy Access: The bill directs the Securities and Exchange Commission to establish rules to allow investors to nominate directors to appear on issuer proxy statements. While this provision doesn’t specifically address potential conflicts with state law, this language should help the SEC fend off a legal challenge from corporate advocates who assert that the agency lacks the authority to adopt an access rule. The bill sets a floor for the minimum ownership threshold (a 1 percent stake for at least two years prior to the next annual meeting) that the SEC may impose, but does not establish a ceiling for such requirements. In 2007, investors complained that a proposed 5 percent threshold for filing access bylaw proposals was too high. While the law does not set a time period for the SEC to act on proxy access, the commission plans to propose several alternative rules at an open meeting today.

Other Governance Standards: Most (if not all) companies would be required to appoint independent board chairs, eliminate staggered board terms, establish new risk committees of independent directors, and adopt a majority vote standard in uncontested elections. Given that majority voting rules can be used to thwart dissident candidates, the law specifies that plurality voting shall apply in contested elections where the number of candidates exceeds the number of directors to be elected.

The bill directs the SEC to act within a year to require the national exchanges to make these four mandates part of their listing standards. However, Schumer’s legislation authorizes the SEC to exempt companies based on size, market capitalization, public float, or the number of shareholders of record. The SEC has granted various extensions to smaller issuers to comply with the auditor attestation requirements of Sarbanes-Oxley, so it’s possible that the SEC may exempt small firms from all (or some) of these governance standards or delay these requirements. The bill directs the SEC to allow issuers an opportunity to cure governance defects before being delisted, but no time period is specified.

These governance provisions, if approved, would have a significant impact on U.S. companies. While a majority of S&P 500 firms now have majority voting and annual elections for all directors, most do not have independent board chairs. Majority voting and declassified boards are less common at small issuers. Separate risk committees are virtually unheard of at U.S. companies, although the audit committees at many companies oversee risk issues, and some boards have compliance panels.

In sum, this legislation would go significantly farther in changing corporate governance practices and expanding shareholder rights than even the Sarbanes-Oxley Act, which primarily targeted accounting and financial reporting practices.

At Shell, it appears that investors objected to the remuneration committee’s decision to approve the vesting of long-term incentive plan awards despite the failure of the Anglo-Dutch oil company to meet pre-set performance targets.

Co-operative Asset Management and Standard Life Investments were among the institutional investors that publicly opposed Shell’s pay practices, according to The Times of London. The Association of British Insurers issued an “amber top” alert to its members before the meeting, according to the Times.

“We are taking this very seriously and we will be meeting with shareholders to take the right decisions,” Shell chairman Jorma Ollila said after the vote, according to news reports. “We have already introduced additional performance measures for future awards reflecting on comments from shareholders.”

Shell is the fifth U.K.-listed company where remuneration reports have failed to win majority support this year. In recent weeks, pay reports at Amec, an engineering firm, and mortgage lender Provident Financial failed to earn majority support. Earlier this year, pay reports were rejected at the Royal Bank of Scotland and homebuilder Bellway. There also was significant dissent against remuneration reports at oil giant BP, mining firm Xstrata, and Rightmove, which publishes online real estate listings, the Times reported.