--Investor approval for Allstate's executive compensation rises
--Increase comes after pay reforms
--CEO Tom Wilson gets more votes for board seat than last year
(Updates comment from CEO in the eighth paragraph, discussion of agents beginning in the ninth.)
By Erik Holm and Joann S. Lublin
Shareholder approval for Allstate Corp.'s (ALL) compensation packages for senior executives rose dramatically after the company reformed some pay practices, according to preliminary results announced at its annual meeting Tuesday.
Some 92% of votes cast were in favor of the nonbinding say-on-pay resolution, up from last year's roughly 57%.
All nominees were elected to the board with support from more than 90% of shareholders who voted, including Chief Executive Officer Tom Wilson, who earned just 68% approval in 2011. Last year's vote for Wilson was the lowest of any CEO of a company in the benchmark Standard & Poor's 500 Index.
Wilson and the board of directors met with shareholders after last year's votes, and the company made changes in stock ownership guidelines, long-term performance pay practices and the benchmark used the evaluate the cash portion of executive pay packages.
Still, a handful of investors had said before the meeting they planned to vote against the say-on-pay resolution after Allstate's board gave Wilson a 20% increase in his pay package for 2011. Many of the changes in pay practices were enacted too late for 2011 but will go into effect with the 2012 package.
Proxy adviser companies Institutional Shareholder Services and Glass Lewis &Co. both advised "yes" votes on the say-on-pay issue, reversing their stances from a year ago. Glass Lewis said the company had taken "very positive steps" in reforming pay but still awarded the company a "D" grade when it came to linking pay to performance in 2011.
All of the company's proposed measures were adopted, including an initiative to reduce the number of shareholders needed to call a special meeting. A shareholder proposal to increase Allstate's disclosure of political contributions was defeated, with roughly 10% support.
"We like the results," Mr. Wilson said in an interview after Tuesday's annual meeting. They reflect the insurer's efforts at "building a more continuous and stronger dialogue with shareholders on governance items," he said.
In his prepared remarks at the meeting, Wilson spoke at some length about the company's roughly 10,000 agents. The company has faced rising dissatisfaction among agents in recent years, has botched some reports showing metrics used to calculate their pay, and plans to cut their base commissions in 2013 while increasing the amount that agents can earn in bonuses.
For the first time, Wilson said the total amount of money spent on agent pay would stay the same or increase. It was a slight change from earlier comments when Wilson said the amount spent on compensation would be unchanged.
"We want our agencies to thrive," Wilson said at the meeting. "When they succeed, we succeed."
During the question-and-answer portion of the annual meeting, the head of the National Association of Professional Allstate Agents, Jim Fish, asked if the board would be taking action on a letter he sent asking the company to hire outside auditors to examine accounting procedures after the errors in performance reports and tax documents earlier this year.
Fish said the errors "have undermined the agents' faith in the company."
The error in the tax documents affected about half of the company's roughly 10,000 agents, and the company said it would reimburse agents for the cost of resubmitting IRS filings, if needed. The other errors were caught before payments were sent to agents.
Wilson said the board had received the letter and that the audit committee "will determine the next steps."
He assured investors that financial results from the company "are accurate and complete" and reiterated that the errors didn't affect agent pay.
"Our goal is to pay all of our agencies the correct amount of money, and on time," he said.
-By Erik Holm and Joann S. Lublin, Dow Jones Newswires; [email protected]