Edison International on Monday stepped up efforts to defeat a shareholder's proposal that would limit executive compensation, arguing in a letter to potential voters that current policies are sufficient.
The letter came days after an influential shareholder advisory group, Institutional Shareholder Services Inc., recommended that Edison stockholders approve the compensation guidelines proposed by John Chevedden, who said he owned about 100 shares of stock in the utility holding company.
Chevedden's proposal calls on Edison to make at least 75% of future stock options and stock awards to its senior executives based on performance measures that are adopted by the board and disclosed to shareholders.
Executive compensation is a hot topic among shareholder advisory groups that complain that top executives are taking home huge sums that are sometimes only tangentially related to the company's financial performance.
Edison Chief Executive John Bryson received more than $12.7 million in salary, incentive pay, stock awards and other compensation in 2006 and took home more than $3 million more by cashing in shares, according to a regulatory filing.
Edison, based in Rosemead, owns Southern California Edison and Edison Mission Energy, an unregulated power producer.
Institutional Shareholder Services said Chevedden's plan warranted shareholder support because Edison's long-term stock compensation program "is not significantly performance-based according to ISS guidelines."
The group doesn't count standard stock options or restricted stock that vests over time as performance-based compensation because share prices often rise in tandem with the overall market regardless of a company's financial performance.
Edison sent a letter to its largest shareholders, urging a "no" vote on Chevedden's proposal and arguing that "all of our senior officers' equity compensation is already performance-based." The company said shareholders had seen returns over the last five years that bested the Dow Jones Electricity index by 160% and the S&P 500 index by 195%.
Chevedden, a veteran at putting prickly matters before the shareholders of public companies, said he was heartened by Institutional Shareholder Services' support. Backing from the group, he said, "is generally recognized as a boost for the vote."
In previous years, Chevedden supported failed proposals at Edison aimed at beefing up shareholder voting rights and making pay packages for departing executives subject to stockholder approval.
Bryson's 2006 compensation included a salary of $1.2 million, incentive pay of $1.9 million, stock awards and stock options valued at $8.8 million, nearly $500,000 in added pension benefits and $300,000 in "other" compensation. That category included $15,900 for club memberships, $20,600 for estate and financial planning and more than $260,000 in other perks.
During the year, Bryson cashed in stock options worth $3.2 million, according to the company's most recent filing.