In the first year that major U.S. public companies have been required to let shareholders vote on executive compensation, few companies failed to gain approval for their plans, but those that did face a high risk of shareholder lawsuits.

With the annual-meeting season wrapping up, just 39 of 2532 companies reported that shareholders rejected their compensation plans, according to a tally by Mark Borges, a principal at executive-pay consultancy Compensia Inc. The votes are non-binding, so companies don't have to change anything even if shareholders disapprove.

Shareholders have filed lawsuits against board directors at five of those companies and, according to the law firm Schulte Roth & Zabel LLP, plaintiffs' lawyers have announced investigations into 18 others. The suits generally allege that directors breached their fiduciary duty to investors by ignoring their wishes for more modest pay packages.

Democratic lawmakers added a "say on pay" mandate to last year's Dodd-Frank financial overhaul amid intense voter anger at Wall Street and the lavish bonuses banks doled out in the aftermath of the 2008 financial crisis.

Supporters pitched it as a way to empower shareholders and discourage compensation practices that encourage excessive risk-taking. Critics in the business community argued nonbinding votes on pay would give too much power to proxy advisory firms that advise large shareholders on how to vote in corporate elections.

Hewlett-Packard Co. (HPQ) and Stanley Black & Decker Inc. (SWK) are among the companies that failed their say-on-pay votes. The companies whose boards are being sued after failed say-on-pay votes include Jacobs Engineering Group Inc. (JEC), Beazer Homes USA Inc. (BZH), Umpqua Holdings Corp. (UMPQ), Hercules Offshore Inc. (HERO) and Cincinnati Bell Inc. (CBB).

H-P and Stanley Black & Decker declined to comment. Umpqua spokeswoman Eve Callahan said the company's board moved last month to add performance conditions to all restricted stock awards and options. "We have a commitment to taking shareholder input seriously and into consideration," she said.

Spokespersons for the other companies who were sued did not respond to requests for comment.

The number of failed votes was not out of line with expectations. Last year, investors rebuked pay practices at only three of 300 companies that held say-on-pay votes voluntarily or had to offer them because they received government bailout funds. But some observers predicted many more companies would face high levels of negative votes, even if their plans passed muster with the majority of shareholders.

In fact, 71% of companies received at least 90% shareholder support for their plans, according to Jim Barrall, who heads the benefits and compensation practice at the law firm Latham & Watkins LLP. Meanwhile, 92% of companies garnered at least 70% shareholder support for their plans.

Aside from lawsuits, board directors at companies that have had their pay plans voted down face unpleasant publicity and the risk that shareholders will vote against re-electing them to their seats.

"You don't ever want to get to a 'no' vote," argued Charles Elson, head of the Weinberg Center for Corporate Governance at University of Delaware's business school. Elson said that even a 20% negative vote from shareholders could signal a company is at risk for a shareholder backlash the following year.

Shareholders upset over pay plans already appear to be venting their frustration by targeting members of board compensation committees. At 36 companies that had failed votes this year, such board members who were up for reelection received an average of 13.5% fewer favorable votes than other directors on the ballot, according to Schulte Roth & Zabel.

Critics of the requirement have seized on the small share of failed votes to argue that executive pay generally isn't a great concern of investors. The issue is "used as a whipping boy by politicians," said Tom Quaadman, vice president of the U.S. Chamber's Center for Capital Markets Competitiveness.

Proxy advisory firms also didn't wield nearly the power over the votes that some had predicted. Institutional Shareholder Services, the dominant proxy adviser, recommended no votes on pay for 298 companies so far this year, many times more than the votes that actually failed.

Meanwhile, fans of the new mandate say it has resulted in a high level of dialogue between companies and their shareholders.

"Lots of company management teams and directors are going out to sell their [compensation] plans to investors," Patrick McGurn, special counsel at ISS, said. "Everyone is taking the process to heart."

-By Jessica Holzer, Dow Jones Newswires; 202-862-9228; jessica.holzer@dowjones.com