Cisco Systems Inc shareholders narrowly approved a say on pay proposal giving them a greater voice in setting executive compensation.
The network equipment provider said that at its annual meeting on Thursday, 33.5 percent of shares were voted in favor of the proposal by Christian Brothers Investment Services Inc to give shareholders a non-binding vote on executive pay, while 31.7 percent were opposed.
Other shareholders abstained or did not vote. Because the vote was close, the San Jose, California-based company did not confirm the proposal passed until late Thursday night.
Cisco said its board of directors will study closely the various ways companies have implemented the say-on-pay proposals and develop an appropriate plan.
A growing number of companies have been adopting say-on-pay in response to increasing shareholder anger over executive compensation, including on Wall Street.
Microsoft Corp's board in September adopted say-on-pay. Among other companies to approve the concept include Apple Inc, H&R Block Inc, Intel Corp and Verizon Communications Inc.
Many pension plans and governance experts view say-on-pay as a way to curb runaway compensation, especially at companies struggling with a weak economy or falling stock price.
Some critics say the concept may help activist shareholders not who do not have companies' best interests at heart, and could make it harder to attract and retain staff.
The House of Representatives in July voted to give shareholders of public companies annual non-binding votes on executive pay, but the Senate has not taken action. The Obama administration has favored say-on-pay.
Cisco opposed the Christian Brothers' proposal, citing proposed legislation and its belief that shareholders had more effective ways to communicate their views on executive pay.
According to Cisco's proxy statement, Chairman and Chief Executive John Chambers was in fiscal 2009 awarded $14.24 million of compensation, including a $375,000 salary, a $2.03 million bonus, $11.82 million of stock and option awards, and $9,998 of other compensation.
Cisco said Chambers' compensation was actually less because the company did not grant certain restricted stock awards based on fiscal 2009 performance.
Shares of Cisco rose 33 cents, or 1.4 percent, to $23.73 in afternoon trading on the Nasdaq.
(Reporting by Jonathan Stempel; Editing by Derek Caney)