The drugmaker last week adopted a by-law that calls for 75 percent of the independent directors to approve the ceo’s pay package. But not without a struggle, according to Harvard Law School prof Lucien Bebchuk, who suggested the shareholder proposal last fall and was quickly rebuffed by the Bristol-Myers’ board, which is led by Jim Robinson (that’s Jim to the right).

When companies don’t like a shareholder proposal, a so-called ‘No Action’ letter is usually written to the Securities and Exchange Commission. And it means just that - its an appeal to the agency to allow a company to take no action on a proposal. And that’s what the Bristol-Myers board did. (You can see the 11 board members here).

Bebchuk, however, wouldn’t take no for an answer. He wrote his own letterto the SEC. Only then did Bristol-Myers’ board relent and agree to adopt the idea as a corporate governance guideline. Bebchuk dropped the proposal.

Message to Jim: good corporate governance requires as much independent thinking as possible when a board must determine executive pay. What were you and the other board members thinking? Your board, which is supposedly shopping for a new ceo, has repeatedly been criticized for poor oversight of former ceo Peter Dolan. You should have known better than to resist such an idea. This sort of episode only makes investors question your judgment all over again.

[tags]Bristol-Myers Squibb, Corporate Governance, Lucien Bebchuk[/tags]