Three Google Inc (GOOGL.O) compensation committee members were re-elected on Wednesday, the technology company said at its annual meeting, despite a challenge from a high-profile proxy adviser that raised concerns over executive pay.
Google did not immediately detail by how much of a margin the directors won re-election at the meeting, which was webcast. Proxy adviser Institutional Shareholder Services had recommended that Google shareholders withhold votes for the three directors, saying “mega grants” provided to Executive Chairman Eric Schmidt and Chief Business Officer Omid Kordestani were “problematic.”
ISS recommended that votes be withheld for Google compensation committee members John Doerr, Paul Otellini and Ram Shriram. ISS also recommended investors withhold votes from Google director John Hennessy, president of Stanford University, citing what it said is his role as a non-independent member of the board’s nominating committee.
The recommendations were unusual for ISS, which urged votes against directors at S&P 500 companies only 3 percent of the time in 2014.
Google said all its director candidates won election. Several shareholder proposals were also defeated at the meeting, Google said, including proposals to require a majority vote standard for the election of directors and to report on the costs of renewable energy investments.
Google awarded Schmidt $100 million in restricted stock units last year – the second time in less than three years that the company’s former CEO has received an equity award of that size.
Kordestani, who was re-hired in October to become chief business officer, received a $60 million equity award and a one-time $65 million supplemental equity award.
He also received a sign-on bonus of $5 million.
ISS, in a report seen by Reuters, said the generous executive pay packages lacked a measurable connection to company performance goals.
However, Pivotal Research Group analyst Brian Wieser said investors would not likely be swayed by ISS’ recommendation.
“Governance issues, unfortunately, as important as they should be, rarely resonate with the investment community. It has to be truly extreme to matter,” Wieser said.
ISS recommended in April that DuPont (DD.N) investors vote in favor of activist investor Nelson Peltz joining the board. But shareholders ended up backing all 12 directors nominated by the company.
At Google, ISS wrote that “Although ISS has not identified any major issues regarding the structure of Google’s executive compensation in past years, the magnitude of total pay provided to certain executives, paired with a lack of performance criteria and compelling rationale, raises significant concerns.”
Schmidt, who focuses on government outreach and deals in his role as executive chairman, handed the CEO reins to Google co-founder Larry Page in 2011.
Page and fellow co-founder Sergey Brin both have a base salary of $1 and no other compensation. Most of their wealth comes from their holdings of Google shares.
Kordestani previously worked with Google as senior vice president of global sales and business development from May 1999 to April 2009.
The chief business officer is considered a key position, overseeing all the company’s revenue-generating activities and serving as a liaison to investors and Wall Street.
Google shares were little changed at $554.05 in afternoon trading on Nasdaq.