Walgreen: How I Voted

Walgreen Co. (WAG) is one of the stocks in my portfolio. Their annual meeting is coming up on January 11. Voting on MoxyVote.com‘s platform ends January 10. When I last looked, MoxyVote.com had recommendations from seven “good causes,” which included three consolidations. ProxyDemocracy.org had five participating funds voting.

WAG’s SummaryCompensation Table shows that Gregory Wasson, the combined CEO/Chairman, was the highest paid named executive officer (NEO) at a little over $12.1 million. According to the United States Proxy Exchange (USPX) guidelines, the median CEO compensation for large-cap corporations was $9 million in 2010. As I announced long ago when we released the USPX guidelines, I will be voting against most pay packages where the company paid above the median in the prior year. I’m open to making exceptions to this crude way of decision-making, but unless give evidence that a specific CEO did something extraordinary, I feel it is a good way of addressing the Lake Woebegone effect which continuously ratchets up CEO pay year after year. No one really needs more than $9 million a year, so that’s where I draw the line for now.

Wasson’s pay is above that amount and the stock lost 20% over the last year compared with a flat S&P 500. Therefore, I am voting against the pay plan and against compensation committee members: James A. Skinner, William C. Foote, Ginger L. Graham, and Nancy M. Schlichting.

John Chevedden has a shareowner proposal requesting our executive pay committee

adopt a policy requiring that senior executives retain a significant percentage of stock acquired through equity pay programs until one-year following the termination of their employment and to report to shareholders regarding this policy before our 2013 annual meeting of shareholders.

I generally like the idea that senior executives retain equity. It keeps them focused on the long term and incentivizes them against leaving a mess for their successor. Therefore, I voted in favor of John’s proposal and hope readers will do likewise.

Also of note: For proposals to be considered for inclusion in the Company’s proxy statement for the Annual Meeting scheduled on January 9, 2013, the proposals must be received by the Company no later than July 21, 2012. Such proposals should be directed to Walgreen Co., Attention: Corporate Secretary, 108 Wilmot Road, Deerfield, Illinois 60015.  I think I’ll note that on my calendar.

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