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This excerpt taken from the AMCC DEF 14A filed Jul 7, 2009. ON
EXECUTIVE COMPENSATION
The Comptroller of the City of New York, William C.
Thompson, Jr. (the “Comptroller”), as custodian
and trustee of the New York City Employees’ Retirement
System, the New York City Teachers’ Retirement System, the
New York City Police Pension Fund, and the New York City Fire
Department Pension Fund, and custodian of the New York City
Board of Education Retirement System (together, the
“Funds”), has advised us that the Funds intend to
present the following proposal and supporting statement at the
annual meeting. The Comptroller’s office represents that
the Funds are the beneficial owner, in the aggregate, of
200,093 shares of our common stock. The Comptroller’s
address is: 1 Centre Street, New York, NY
10007-2341.
The proposal and supporting statement that we received from the
Comptroller’s office are set forth below.
Our Board of Directors strongly opposes adoption of this
proposal and requests that our stockholders read our
Board’s response to the proposal which follows the proposal
and the proponents’ supporting statement below.
RESOLVED, that shareholders of Applied Micro Circuits
Corporation (“the Company”) urge the board of
directors to adopt a policy that shareholders be given the
opportunity at each annual meeting of shareholders to vote on an
advisory resolution, to be proposed by the Company’s
management to ratify the compensation of the named executive
officers (“NEOs”) set forth in the proxy
statement’s Summary Compensation Table (the
“SCT”) and the accompanying narrative disclosure of
material factors provided to understand the SCT (but not the
Compensation Discussion and Analysis). The proposal submitted to
shareholders should make clear that the vote is non-binding and
would not affect any compensation paid or awarded to any NEO.
SUPPORTING
STATEMENT
Investors are increasingly concerned about mushrooming executive
compensation which sometimes appears to be insufficiently
aligned with the creation of shareholder value. Additionally,
recent media attention to questionable dating of stock options
grants by companies has raised related investor concerns.
The SEC has created a new rule, with record support from
investors, requiring companies to disclose additional
information about compensation and perquisites for top
executives. The rule goes into effect this year. In establishing
the rule the SEC has made it clear that it is the role of market
forces, not the SEC, to provide checks and balances on
compensation practices.
We believe that existing U.S. corporate governance
arrangements including SEC rules and stock exchange listing
standards, do not provide shareholders with enough mechanisms
for providing input to boards on senior executive compensation.
In contrast to U.S. practices, in the United Kingdom,
public companies allow shareholders to cast an advisory vote on
the “directors’ remuneration report,” which
discloses executive compensation. Such a vote isn’t
binding, but gives shareholders a clear voice that could help
shape senior executive compensation.
Currently U.S. stock exchange listing standards require
shareholder approval of equity-based compensation plans; those
plans, however, set general parameters and accord the
compensation committee substantial discretion in making awards
and establishing performance thresholds for a particular year.
Shareholders do not have any mechanism for providing ongoing
feedback on the application of those general standards to
individual pay packages. (See Lucian Bebchuk & Jesse
Fried, Pay Without Performance 49 (2004))
Similarly, performance criteria submitted for shareholder
approval to allow a company to deduct compensation in excess of
$1 million are broad and do not constrain compensation
committees in setting performance targets for particular senior
executives. Withholding votes from compensation committee
members who are standing for reelection is a blunt and
insufficient instrument for registering dissatisfaction with the
way in which the committee has administered compensation plans
and policies in the previous year.
Accordingly, we urge Applied Micro Circuits
Corporation’s board to allow Shareholders to express
their opinion about senior executive compensation at the Company
by establishing an annual referendum process. The results of
such a vote would, we think, provide the Company with useful
Table of Contents
information about whether shareholders view the company’s
senior executive compensation as reported each year, to be in
shareholders’ best interests.
RECOMMENDATION
OF OUR BOARD OF DIRECTORS
This excerpt taken from the AMCC 10-K filed Jun 7, 2005. Item 11. Executive Compensation.
The information required by this Item is incorporated by reference to the sections entitled “Compensation of Executive Officers”, “Option Grants in Last Fiscal Year”, “Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values”, “Employment Severance and Change of Control Agreements,” “Report of the Compensation Committee,” “Compensation Committee Interlocks and Insider Participation,” “Summary Compensation Table,” “Option Exchange Program” and “Ten Year Option Exchange” in the proxy statement.
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