NEW YORK Interpublic Group shareholders today narrowly defeated a proposal that would have allowed holders of 10 percent of IPG’s outstanding common shares to call special meetings.
Given the close vote — 51 percent against, 48 percent for and 1 percent abstaining — IPG CEO Michael Roth said the company’s board of directors would reexamine its current bylaws, which allow for special meetings but require the approval of a majority of the holders of outstanding shares. A majority of IPG’s directors can also propose such meetings.
“Whenever you have a vote like that, it’s incumbent upon the board to look at it,” said Roth, after the vote held at the company’s annual shareholders meeting here. Referring to the current majority threshold, Roth added: “I think we have an obligation to look at that number.”
Such a reexamination of the bylaws would come before the board’s Governance Committee, Roth said.
The argument for the special meeting move — put forth by shareholder Ken Steiner of Great Neck, N.Y. — was that investors need the ability to meet on “important matters, such as a takeover offer, that can arise between annual meetings,” Steiner wrote in his proposal. At today’s meeting, he added: “In the absence of such rights, shareholder value can suffer.”
Another shareholder proposal today calling for an advisory vote on top executive compensation was also defeated, though that vote was not close.
IPG management had opposed both measures.
Sixty-three percent of the stockholders who voted opposed the “Say-On-Pay” proposal, which called for an annual nonbinding vote on compensation packages for corporate officers such as Roth. Thirty-three percent were in favor and 4 percent abstained.
The rationale for such a vote, as proposed by the California Public Employees Retirement System, was that “too many times companies pay for failure and overpay for average performance,” Calpers wrote in its proposal. “Existing U.S. corporate governance arrangements . . . do not provide shareowners with enough mechanisms for providing input to boards on senior executive compensation.”
In its proxy statement, IPG argued that a “Say-On-Pay” vote is unnecessary because shareholders can already communicate directly with the board on this issue, and special meetings for a company with thousands of shareholders would be “very expensive” and “time-consuming.”
In other business today, stockholders reelected 10 board directors for another year and reappointed longtime outside auditor PricewaterhouseCoopers. In addition, Roth accepted the resignation of director J. Phillip Samper, who had served on the board since 1990 and is retiring. Samper had been the longest serving board member — a distinction that now falls to Frank Borelli, who has been a director since 1995.
About 75 people attended the 45-minute meeting, which took place at the Paley Center for Media.