Last week, Bristol-Myers Squibb followed Home Depot to become the second company to reform its pay-setting process on the basis of shareholder proposals I submitted.  Last fall I submitted to Bristol-Myers Squibb a shareholder proposal to adopt a bylaw provision requiring that decisions about the CEO’s compensation be ratified by three-quarters of the company’s independent directors.  The text of the proposal and an accompanying supporting statement are available here. 

The company initially sought to exclude the proposal from the ballot, and I filed with the SEC a letter opposing the company’s request for a no-action letter.  Subsequently, however, the company and I reached an understanding under which the company agreed to adopt the proposed arrangement as a corporate governance guideline and I agreed to withdraw the proposal.

Last week the company’s Board of Directors approved the revision of the company’s corporate governance guidelines, which now state the following: “The Chief Executive Officer’s compensation must be approved by at least three-fourths of all the independent directors of the Board.”  In addition, the Board approved corresponding language changes in the charter of the Compensation and Management Development Committee.  Both the Corporate Governance Guidelines and the Compensation and Management Development Committee Charter are available on the company’s website here.

Earlier on, following my submission of a proposal to Home Depot, Home Depot and I reached an understanding under which the company amended its bylaws to implement the proposed arrangement and I withdrew my proposal.

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