On May 5, insurance giant Aflac will announce the results of its shareholder vote on the pay packages of its five highest-paid executives, becoming the first major U.S. public company to put its compensation policies up for stockholder review. Although the vote is nonbinding, the company says it plans to seriously consider shareholder suggestions if its pay proposal gets voted down, and the move could help usher in a new era of how executive pay is determined.

The step comes amid increasing public outcry and political debate over lavish executive compensation—the average C.E.O. made 465 times what the average U.S. worker made in 2005, up from 54 times in 1980. Last year, the House of Representatives passed the Shareholder Vote on Executive Compensation Act, which would require companies to adopt an Aflac-like vote of approval on the pay of top executives; the bill is awaiting a vote in the Senate.

Meanwhile, in March, the chairman of the House Oversight and Government Reform Committee, Representative Henry Waxman, Democrat of California, grilled Countrywide Financial C.E.O. Angelo Mozilo; former Merrill Lynch C.E.O. Stan O’Neal; and former Citigroup C.E.O. Chuck Prince about their huge compensation packages, in light of their companies’ enormous losses last year.  

“The concept of executive pay, and the linking of pay and performance, is something we’re seeing tremendous media attention on and growing public scrutiny of,” says Dawn Wolfe, a social-research analyst at Boston Common Asset Management, which initially asked Aflac, along with 50 other companies, to consider a say-on-pay provision back in 2006. “I don’t think it’s something that’s going to go away anytime soon.”

Indeed, while Aflac may be the first firm to implement this measure, other public companies, including Blockbuster, Verizon, and RiskMetrics Group, have agreed to introduce similar votes for the 2009 proxy season.

For his part, Aflac’s long-time C.E.O., Daniel Amos, admits he was surprised when the proposal from Boston Common first came to him, in 2006. “My initial reaction was, ‘What have I done wrong?’ ” Amos recalls. But after discussing the proposal with Aflac’s board of directors and talking to the company’s institutional and individual shareholders, Amos decided that the measure would help increase transparency and show Aflac’s responsiveness to shareholders, and he recommended to the board that the proposal be passed. The company, which provides health and life insurance to more than 40 million people around the world and is well-known for its ubiquitous duck, officially announced the new policy in early 2007.

Naturally, it’s companies like Aflac, in which the C.E.O.’s and management teams have performed the best, that are most likely to be willing to subject their executives’ pay to shareholder scrutiny. Amos, for example, made $14.8 million in 2007, which was about the average compensation for a C.E.O. at one of the country’s 500 largest companies in 2006. But as the firm points out, Aflac’s stock has had a total return of more than 3,800 percent since Amos became C.E.O., in August 1990, compared with 660 percent for the Dow Jones industrial average and 549 percent for the Standard & Poor’s 500-stock index over the same time period.

“If you do it based on performance, I’d like to know, if we don’t pass, then who would?” Amos asks. (Watch our video of Amos giving his take on other well-known pay packages and price tags.)

While Amos is reluctant to say whether other companies are likely to follow his firm’s lead in this area, he does feel that the practice makes good sense for a public company.

“When [shareholders] want to communicate a message, we need to listen,” Amos says. “They cannot micromanage a company, but they certainly deserve input as the owners of the company.”