Exxon to Detail Pay Consultant Business

More than 25 companies have been pressured by institutional shareholders in recent months to come clean about relationships with their compensation consultants. Under new Securities and Exchange Commission rules put in place this year, companies will be required to disclose in public filings the name of their compensation consultants, but not their other business relationships with those companies.

Shareholders are seeking this disclosure due to concerns that consultants that rely on management's approval to win other work at the company, such as crafting benefits plans for rank-and-file workers, may be reluctant to provide objective advice on how these same executives are paid.

General Electric Co. also agreed to comply with this disclosure in its next proxy statement, it was reported Thursday. Pfizer made this information available to shareholders in its March 2006 proxy and plans to do so again next year. More about how other companies are reacting to the request will be known Tuesday when shareholders leading a letter campaign make public the results of their effort.

Exxon told shareholders in November that it plans to add this information to its coming proxy statement, which is scheduled to be mailed to investors in April, Exxon spokesman Dave Gardner said Friday.

In October, a group of 13 institutional investors sent a joint letter to the 25 largest Standard & Poor's 500 companies, including Exxon and GE, asking for this information. In early November, union group AFL-CIO submitted proposals to GE, Home Depot Inc. and Wal-Mart Stores Inc., asking that shareholders vote on whether the company should disclose this information in its proxy. Other institutional shareholders have submitted proposals at still more companies, said Daniel Pedrotty, director of the office of investments with the AFL-CIO.

Companies that say no to the letter requesting increased disclosure may also be targeted with proposals asking to give shareholders a vote, said Bernard Kavaler, spokesman for Connecticut Treasurer Denise L. Nappier, which signed the letter. So far, two-thirds of the 25 companies that received the October letter have responded, said Kavaler, who declined to specify how many agreed to make the information available to shareholders.

In 2006, Exxon's board of directors worked with New York compensation consulting firm Pearl Meyer & Partners, a unit of Clark Consulting Inc., according to an e-mail statement from Gardner. Pearl Meyer didn't provide "any other services to the corporation," Gardner said. Officials from Pearl Meyer weren't immediately available for comment.

Other companies that received the letter include Hewlett-Packard Co., Morgan Stanley, Wal-Mart Stores and Home Depot. None of these companies was immediately available for comment.

Shareholders behind the effort have likened such ties to when auditing firms provided consulting work for the companies they were auditing - a situation that some say contributed to the accounting scandals at Enron Corp. and WorldCom Inc. The Sarbanes-Oxley act of 2002 restricted the non-audit services firms are allowed to provide audit clients.