STERIS Corp. (NYSE: STE) will give shareholders a say on the company’s executive compensation program at their July annual meeting.
The Mentor, Ohio, maker of healthcare technologies is asking shareholders to approve a “nonbinding, advisory proposal” to endorse or not endorse its policies and procedures on executive pay. Such votes often are called “Say on Pay” proposals. Proponents of such proposals say they strengthen the relationship between a company and its shareholders. Opponents say the proposals do little to affect excessive executive pay.
STERIS also is seeking shareholder approval of changes to its plan to pay executive extra, based on their performance.
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“We believe that our compensation policies and procedures are based on a pay-for-performance philosophy and are aligned with the long-term interests of our shareholders,” STERIS said in the proxy statement for its July 29 annual meeting. Still, the company’s directors — who include Richard Breeden, former Securities and Exchange Commission chairman and a corporate governance activist — are asking shareholders for their support.
Breeden Capital Management, the firm that manages the holdings of several Breeden hedge funds, owns more than 5 million STERIS shares, or 8.6 percent of shares outstanding. Based on Tuesday’s closing price of $33.43 for the shares, Breeden Capital holds $169.4 million-worth of STERIS shares.
In March, Breeden Capital associate Robert Fields resigned from the STERIS board upon leaving the employ of the asset manager. Breeden and Fields joined the board of the infection-prevention, decontamination and health-science technology company in April 2008 to wake up its revenue growth and corporate governance policies.
Given their reputations for proxy fights, the two agreed to refrain from soliciting shareholder vote proxies to get their way at STERIS as long as they — or their replacements — were on its board. The agreement between Breeden Capital and STERIS also gave Breeden the right to nominate a director to replace the departing Fields.
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According to the director slate in the company’s proxy statement, it appears Breeden took a pass on exercising that right. None of the other eight directors standing for re-election at the annual meeting have ties with Breeden Capital.
