Three additional companies have failed to obtain majority support in their say-on-pay votes: Umpqua Holdings Corporation, Stanley Black & Decker, Inc. and Navigant Consulting. Interestingly, Umpqua, in its Form 8-K reporting the results of the vote, stated that it believed that "the vote against the "say-on-pay" resolution was primarily the result of votes cast by institutional investors that followed the recommendation of Institutional Shareholder Services (ISS), a proxy advisory service" due to an ISS report that found a "disconnect" between the CEO's 2010 compensation and the company's total shareholder return, and then included an analysis of the reasons the company believed ISS was wrong in its recommendation. Umpqua follows other companies, including General Electric, Northern Trust, Disney and Hewlett-Packard, which filed additional proxy materials to explain why they disagreed with ISS's recommendations, or to point out factual errors in ISS's recommendation.
In addition, two companies that previously failed to receive approval for their advisory "say-on-pay" Dodd-Frank proposal have had shareholder derivative lawsuits filed against their board members, compensation committee members and even compensation consultants. The derivative suits allege that executives and board members breached their fiduciary duty and engaged in corporate waste and unjust enrichment. Although only 53.7% and 53.9%, respectively, of the votes cast voted against the proposal, each of the lawsuits cited the negative advisory vote as support for the proposition that defendants had breached their fiduciary duties. The lawsuits are seeking unspecified damages and an order implementing internal controls to prevent excessive executive compensation.