For Immediate Release
Wednesday, June 11, 2003
AFSCME Pension Plan Urges Siebel Systems Inc. to Institute Corporate Reform Re: Executive Compensation
SAN MATEO, CA —Today at the annual meeting of Siebel Systems (NASDAQ: SEBL), the American Federation of State, County and Municipal Employees' (AFSCME) Pension Plan urged the Board of Directors to adopt a policy that requires the cost of employee and director stock options to be recognized in Siebel's income statement. Angry AFSCME Plan members and other shareholders protested outside the meeting.
"CEO Tom Siebel realized $300 million in total compensation over the past three years. During that same time, shareholders saw their stock drop from $84 to $7. We think it's shameful for CEOs to reap these huge rewards as shareholders, the true owners of the company, watch their retirement savings disappear," AFSCME Pension Plan Chair Gerald W. McEntee said.
He added, "Siebel is one of the most egregious examples of corporate compensation abuse through the use of stock options. CEO Tom Siebel earned 7,538 times as much as the average American worker."
Stock options comprise a very large portion of Siebel's executive compensation. According to the company's proxy statement, in 2001 alone, Siebel was awarded stock options valued at $192,247,427 million or $487,192,725 million. In 2000, the options he received were worth $252,422,581 or $639,688,380 (depending upon return assumption used).
"The failure to expense stock options distorts reported earnings," said McEntee. "We believe that voluntarily expensing stock options sends a signal to the market that a company is committed to transparency and responsible corporate governance."
The AFSCME Pension Plan has emerged as the foremost activist fund in the United States regarding shareholder rights. The Plan vigorously fights for shareholder rights because AFSCME's members depend on the union to protect their retirement assets from corporate greed. AFSCME represents 1.4 million public service employees with more than $1 trillion invested in public funds.
Last March McEntee warned corporations that shareholder voices would be heard this proxy season and they have. "Our first reincorporation proxy at Tyco, Inc. won 26 percent of the vote and our latest vote at Ingersoll-Rand won 46 percent. Both votes are a clear indication that shareholders are taking an increasingly active role in protecting their investments," McEntee said.
"The 2003 shareholder season was only the start to restoring investor confidence. We will continue to aggressively support initiatives that will give shareholders a voice in corporate governance reform," McEntee added.
