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FMC Technologies 2006

     RESOLVED, that stockholders of FMC Technologies, Inc. (the “Company”) urge the Compensation Committee of the Board of Directors (the “Committee”) to adopt a policy requiring that senior executives retain a significant percentage of shares acquired through equity compensation programs during their employment, and to report to stockholders regarding the policy before FMC Technologies’ 2007 annual meeting of stockholders.  The Committee should define “significant” (and provide for exceptions in extraordinary circumstances) by taking into account the needs and constraints of the Company and its senior executives; however, the stockholders recommend that the Committee not adopt a percentage lower than 75% of net after tax shares.  The policy should address the permissibility of transactions such as hedging transactions which are not sales but reduce the risk of loss to the executive.

SUPPORTING STATEMENT

     Equity-based compensation makes up a substantial portion of overall senior executive compensation at FMC Technologies.  During fiscal year 2004, Chairman, CEO and President Joseph Netherland received $2,332,493 in salary and bonus, while receiving restricted stock with value of $2,186,574 and 95,400 options. For 2003, he received cash compensation of $1,781,449, while receiving restricted stock with value of $1,939,198 and 150,000 options. 

     FMC Technologies believes its equity plans are designed to link closely the long-term reward of executives with increases in stockholder value. Unfortunately, the company’s generous equity compensation programs have not translated into meaningful levels of stock ownership.  The Company’s 2005 proxy statement disclosed that Mr. Netherland owned only 3,037 shares outright, but held 709,466 options and restricted stock.  In fiscal year 2004, Mr. Netherland exercised 426,169 options for realized value of $6,245,267, while in 2003 he exercised 124,787 options with realized value of $1,252,245.  Having exercised over 550,000 options, Mr. Netherland owns less than one percent of that number of shares.  The 2005 proxy also disclosed that Executive Vice President Peter Kinnear owned 4,293 shares outright while holding 168,392 options and restricted stock and Senior Vice President Charles Cannon owned 789 shares outright while holding 199,860 options and restricted stock. We believe that the alignment benefits touted by the Company are not being realized.

     Requiring senior executives to hold a significant portion of shares obtained through compensation plans would focus them on the company’s long-term success and would help align their interests with those of FMC Technologies’ stockholders.  A report by a commission of The Conference Board endorsed the idea of such a requirement, stating that the long-term focus promoted thereby “may help prevent companies from artificially propping up stock prices over the short-term to cash out options and making other potentially negative short-term decisions.” 

     As long-term stockholders, we believe it’s critical for compensation programs to incentivize executives to manage for the company's long-term interests. Recent corporate history, we think, shows the dangers of a short-term mentality in which executives extract value through equity-based compensation, and then cash out before the effects of their mismanagement becomes apparent to other shareholders.

      We urge stockholders to vote for this proposal.

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