For a second year, most TCF Financial Corp. shareholders did not support the company's executive compensation in a nonbinding advisory vote at the company's annual meeting.
In a filing with securities regulators, TCF on Tuesday said 30.7 percent of shares supported TCF's pay plan during the vote at the shareholder meeting held April 22.
"Fundamentally, we respect the vote of shareholders on the matter," said Mark Goldman, a TCF spokesman. "We think that many shareholders have recognized these changes, and we believe that the nonbinding vote reflects an evaluation of past practices on the matter."
The Wayzata bank company last year received support from 45.6 percent of shareholders in the say-on-pay vote, down from 61.4 percent in 2013.
After last year's vote, TCF engaged major shareholders and made changes in response to feedback. It reduced target annual cash incentive levels, instituted long-term equity awards tied to total shareholder return, moved to double-trigger restricted stock awards in the event of a change in control, offered a proposal allowing for shareholders to call a special meeting and amended certain conditions in the contract of William Cooper, its chairman.
The proxy advisory firm Glass Lewis & Co., in its report on TCF before this year's annual meeting, acknowledged the changes and called them "generally positive." It still recommended shareholders vote against the say-on-pay proposal. "While we will carefully evaluate the implementation and effects of the disclosed changes, we do not believe that shareholders should support this proposal at present," the firm wrote.
TCF's Goldman said the company will continue to engage its shareholders on its pay and governance practices. "We are committed to additional dialogue," he said.
Shareholders at U.S. companies this year have generally become more supportive in say-on-pay votes. According to data from Equilar, an executive compensation and corporate governance data firm based in Redwood City, Calif., 75 percent of companies who have reported their annual meeting results this season have had shareholder support for their say-on-pay proposals greater than 90 percent. That's up from 71 percent of all companies in 2014.
On average 2.2 percent of the more than 3,000 companies that Equilar tracks each year failed their say-on-pay votes since 2011. TCF is the sixth to fail this year.
According to Equilar, 30 companies have lost at least two say-on-pay votes since 2011.
"If the company does not take the appropriate steps or enough steps, to really remedy the situation and improve the areas the shareholders are concerned with then that company is much more likely to get punished through a failed vote again," said Aaron Boyd, a spokesman for Equilar.
Among other big Minnesota companies, Regis Corp. lost an executive pay vote in 2011, Best Buy Co. Inc. and Digital River Inc. in 2012, and Uroplasty Inc. in 2014.
Patrick Kennedy • 612-673-7926
