Shareholders of TCF Financial Corp. have repudiated the bank's pay for its executives, according to a filing with the Securities and Exchange Commission.
In a nonbinding vote, 54 percent of the company's shareholders opposed its pay packages for top executives, including $4.8 million in total 2013 pay for William Cooper, the Wayzata-based company's chief executive and chairman.
"We respect the vote of our shareholders on this matter," TCF Financial said in a statement. "Based on the outcome of the nonbinding vote, we intend to meet with many of them and will then move forward with addressing any concerns regarding TCF's incentive compensation model."
The chance to say "yea" or "nay" to executive pay was given to shareholders by the Dodd-Frank Act in 2009. The vote is nonbinding, but corporate directors have become wary of the warning shot that can be fired when too many investors vote "no" to their pay packages.
A "no" vote is rare. Nationally, in 2013, only 81 out of 3,320 votes opposed executive pay, about 2 percent. So far in 2014, only four out of 389 boards have lost their vote, according to Equilar, an executive-pay tracker.
Hillary Sale, a law professor at Washington University in St. Louis, sees 70 percent approval as a threshold for good corporate governance. Of the 389 votes held so far in 2014, according to Equilar, only 21 have fallen below that level.
TCF has had declining support for its executive compensation. In 2012, 76.2 percent of the shares were voted to approve the executive compensation program. Support fell in 2013, with only 61.4 percent of shares voted for the pay program.
"The impact on boards is actually more significant than the impact on pay itself, at least so far," Sale told the Star Tribune in 2013. "If they get a bad pay vote, next year's vote will be one targeting them."
Say-on-pay votes have given mutual funds, pension funds and insurance companies the chance to assert themselves when they feel the boss' pay has decoupled from the company's performance.
The TCF vote was the first no vote for a Minnesota company since 2012, though Target nearly had its pay packages rejected in 2013, with 52 percent of the vote in favor.
Three Minnesota companies have felt the sting of rejection on boss pay in recent years. Best Buy and Digital River both lost votes in 2012, and Regis lost an executive pay vote in 2011.
At TCF Financial, Chief Financial Officer Michael Jones' 2013 total pay was $921,831; operations chief Thomas Jasper's pay was $1.9 million; head of lending Craig Dahl's pay was $1.9 million; and head of corporate development Barry Winslow's pay was $1.4 million. Jasper, Dahl and Winslow are all on the board of directors, and Cooper is its chairman.
Cooper's compensation included a $1.5 million salary, $3 million in incentive pay and $276,000 in perks and matching contributions to an employee stock purchase plan. About $131,000 was for personal use of company aircraft, according to company filings.
Staff writer Patrick Kennedy contributed to this report.