AT&T INC. | Improve clawback policy for unearned executive pay at AT&T INC.

Status
9.65% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
T
Lead filer
Individual
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Remuneration or pay
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Telecom
Company HQ country
United States
Resolved clause
RESOLVED: Shareholders ask the Board of Directors to amend the Company Policy on recoupment of incentive pay to apply to the each Named Executive Officer and to state that conduct or negligence – not merely serious misconduct – may trigger application of that policy. Also the Board is to report to shareholders in an EDGAR filing the results of any deliberations about whether or not to cancel or seek recoupment of compensation paid, granted or awarded to NEOs.
Supporting statement
"SUPPORTING STATEMENT: These amendments should operate prospectively and be implemented so as not to violate any contract, compensation plan, law or regulation. This includes that at the time of the amendment that no section of such revised policy be adopted that would act against this proposal and make it more difficult to clawback unearned NEO pay and that no section of such revised policy shall further restrict the current policy.

The current AT&T policy applies only to knowing fraudulent or illegal conduct.

The current AT&T policy requires no report to shareholders.

Because the AT&T clawback policy is limited to knowing fraudulent or illegal conduct and does not require disclosure to shareholders, that policy is too narrow, too vague, and does not address situations where an executive fails to exercise oversight responsibilities that result in significant financial or reputational damage to AT&T. It should.

A clawback policy based on conduct – not serious misconduct is consistent with a 2022 rule from the Securities and Exchange Commission that requires a clawback of erroneously awarded incentive pay – even with no misconduct – if a company restates its financial statements owing to material errors.

There are only 50-words in the 2023 AT&T annual meeting proxy under the heading of Clawback Policy and there is no listing of the web address for the complete AT&T Clawback Policy.

Wells Fargo offers a prime example of why AT&T needs a stronger policy. After 2016 Congressional hearings, Wells Fargo agreed to pay $185 million to resolve claims of fraudulent sales practices. Wells Fargo’s board then moved to claw back $136 million from 2 top executives. Wells Fargo unfortunately concluded that the CEO had only turned a blind eye to the practice of opening fraudulent accounts."

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