AMR Corporation (NYSE:AMR) rejected three proposals relating to executive pay during its annual meeting yesterday. First, the Allied Pilots Association had sponsored a resolution to give shareholders an advisory vote on executive compensation each year; however, this proposal was rejected by 59% of AMR's shares. A second resolution that was also rejected would have required that 75% of all stock options and bonuses given to executives were tied to performance metrics. Finally, a third proposal relating to how director votes were cast was also rejected.

So, why are all of these executive pay proposals being rejected by companies? Well, the fact is that many average employees that are affected by these proposals do not actively vote their shares. Rather, the company and institutional shareholders close to the company tend to be the only ones casting the votes. If these proposals are to gain any traction in the future, they will need to attract not only additional institutional interest but also the more common shareholders that tend to have a case of voter apathy.