ROSEMONT | NiSource Inc. stockholders on Tuesday overwhelmingly approved of CEO Robert Skaggs Jr.'s $5.77 million pay package for 2010 along with that of four other top executives.
Altogether, 190 million shares, or 83 percent of shares voting, approved of the pay packages for the company's five highest-paid employees in the first vote on the matter. Stockholders also approved a proposal to vote on executive pay at each future annual meeting.
The votes were a new requirement imposed on publicly traded companies by the U.S. Securities and Exchange Commission in reaction to the financial meltdown of 2008. Shareholders automatically had their say this year under the regulation and then were required to decide if they want to do that every year, every other year or every third year.
The votes are advisory in nature only, but it is hoped any vote against compensation packages would send a strong message to a company.
One pay package in particular, the $1.9 million for NIPSCO CEO Jimmy Staton in 2010, was controversial with many NIPSCO customers because the utility had asked state regulators for a rate hike. But based on their vote Tuesday, the parent company's owners back the pay allotted for top executives and no one questioned them at the meeting.
Shareholders also returned all 10 incumbent directors to the NiSource board at the annual meeting held at the Hilton Rosemont Chicago O'Hare. All board members stand for election every year.
A proposal from a shareholder activist went down in defeat at Tuesday's meeting but not by a very wide margin.
The proposal would have allowed shareholders to take action by written consent rather than at an annual or special meeting. It was opposed by the company and was defeated with 58 percent of shares voting no on the proposal or abstaining, which counts as a vote against.
The votes on executive compensation were a new wrinkle for the annual meeting, which proceeded in a more bare-bones fashion than previous ones. It lasted about 35 minutes.
In many previous annual meetings, the board chairman or CEO usually gives presentations on progress at the company complete with slide shows. But this year, Skaggs said the company wanted to let recent presentations, including last week's statements on first quarter earnings and the ensuing conference call, serve as the company's progress update for shareholders.
NiSource stock had a good day on the day of the annual meeting, with the share price rising 3.25 percent to $20.31 on trading volume nearly three times the usual.
During the meeting's question-and-answer session, stockholder Ben C. Liu wanted to know if NiSource expects to increase its dividend, which has held steady at 23 cents a quarter for a number of years.
Board chairman Ian Rolland told Liu that for years the company could not consider dividend increases because of the need to maintain a stable, investment-grade credit rating. The company now has strengthened to the point where it is no longer in danger of losing its investment-grade rating.
"Clearly the dividend is a matter of ongoing consideration by the board," Rolland said, offering stockholders some hope.
Stockholder Martin Minich wanted to know about NiSource's position on cap-and-trade legislation that was a hot topic in the U.S. Congress in previous years. Skaggs said the company has been a "reluctant, reluctant supporter" of cap-and-trade if it is properly structured.
However, he noted there seems to be little predilection for action on the issue in Congress now, and so the status quo is prevailing.