The anti-executive pay movement is building momentum.

About 55 percent of shareholders of KeyCorp last week gave the thumbs down on the bank's pay package contained in its proxy during an advisory vote.

This is the third company whose shareholders rejected their pay package in an exercise known as Say on Pay. The previous two were Motorola and Occidental Petroleum.

Of course, there is nothing shareholders can do about these votes since they were non-binding.

RiskMetrics points out that Keycorp is the first participant in the U.S. government's Troubled Asset Relief Program (TARP) to receive majority opposition over its pay practices. Remember, all TARP recipients must hold these Say on Pay votes.

The governance research firm points out that KeyCorp received 87.2 percent approval during its 2009 advisory vote. 

"This year's dissent appears to reflect the disconnect between growing CEO pay and KeyCorp's lagging financial performance," RiskMetrics asserts in a recent blog. It points out that the bank's stock fell 34 percent over the past year and 45.3 percent over three years; both trail the performance of the company's industry peers and the S&P 500.

"Obviously we're disappointed with the results of the advisory vote and we take it very seriously," Keycorp Compensation and Organization Committee chair Ed Campbell says in a statement. "The Compensation Committee will consider this as we evaluate the executive compensation program, and we'll work to understand specific concerns regarding the compensation structure as we consider changes in the future."

RiskMetrics points out that last year KeyCorp CEO Henry Meyer saw his total compensation surge by 40.8 percent to $8.7 million. Actually, it rose about 21 percent, to $8.1 million.

In any case, Meyer saw the value of his stock option awards increase by roughly 2 ½ times from the prior year and a large salary stock increase. The governance firm points out that like other TARP firms, KeyCorp has shifted to salary stock to get around restrictions on incentive pay. "The company has taken some efforts to address shareholder concerns about pay, such as eliminating tax reimbursements on perks and change-in-control payments, and freezing its qualified and non-qualified pension plans," it adds.

For its part, a KeyCorp spokesman stresses that during 2009 and continuing in 2010, the bank has been prohibited by the regulations imposed by TARP from structuring compensation that directly links pay and performance. Actually, they can in principle. It is more nuanced than that, however, because there are many restrictions on the kinds of compensation that can be delivered, including certain types of bonuses.

"When KeyCorp exits TARP, the Compensation Committee intends to promptly change the current compensation program to reinstate an appropriate pay-for-performance compensation philosophy," according to the statement sent to cfozone.com. "This will be consistent with not inducing undue risk taking and with the overall objective of increasing shareholder value."

The spokesman also stresses that Meyer received no bonus and the salary increase that was entirely provided in Key stock cannot be sold or otherwise transferred until Key's exit from TARP. "In its assessment of company performance against established goals for 2009, the C&O Committee acknowledged management's efforts in strengthening capital ratios, liquidity and funding ratios," the spokesman adds in a statement.