ISS – an institutional proxy advisory firm – has advised General Motors’ shareholders to reject the compensation proposals made for the company’s top executives when they meet for the company’s annual meeting in June. This recommendation is to be directed at the GM’s CEO Mary Barra, CFO Paul Jacobson and President Mark Reuss and other members of the leadership teams. Say on pay is a significant part of corporate governance as it involves shareholder voting for approval of the compensation given to the executives of the firm.
ISS alleged that a “pay-for-performance misalignment” occurred in the past year and although the vote is non-binding it is still a big vote of no confidence in SAB’s management. A group of advisers for GM still recommends for the removal of some of the executives despite lowering the performance standards.
ISS still believes there are not enough supporting factors for the year to give a passing grade, especially when it comes to the compensation packages that GM provided. Other cited short-term incentive payout was tied on financial benchmark but even those metrics where missed.
This recommendation comes as GM aggressively pursues the emerging markets such as electric vehicles and autonomous driving. It is having difficulties in the expansion process and considers an additional round of funding to the self-driving unit Cruise. The shareholders vote could be deemed to indicate if the company’s investors approve the leadership and GM’s direction.