For Immediate Release
Wednesday, May 12, 2004
AFSCME Employee Pension Fund to "Vote No" on Directors at 10 Companies
Powerful Pension Fund holding Directors Accountable for Inaction
WASHINGTON —The AFSCME Employees Pension Fund announced its decision today to withhold votes from corporate directors at 10 companies during annual shareholder meetings.
"All of the companies on the AFSCME 'Vote No' list have directors that have shown a flagrant disregard for the will of their shareholders. These directors have deliberately and repeatedly ignored shareholders' requests on fundamental corporate governance issues," said Gerald W. McEntee, chair of the AFSCME Employee Pension Fund.
"The AFSCME Employee Pension Fund will not accept board members that ignore the real owners of the company" shareholders. Our message is if you want our vote, you need to listen to our concerns," McEntee continued.
The list of No votes includes companies with annual meeting between May 13 and June 10th. The corporations where AFSCME will withhold votes for one or more directors include: Sears (NSYE: S), First Energy (NYSE: FE), Gillette (NYSE: G), Alaska Air Group (NYSE: ALK), Federated Department Stores (NYSE: FD), May Department Stores (NYSE: MAY), Qwest (NYSE: Q), Exxon Mobil (NYSE: XOM), Home Depot (NYSE:HD) and Albertson's (NYSE: ABS).
The AFSCME Employees Pension Plan is a leading institutional shareholder activist with more than $600 million in assets.
AFSCME Employees Pension Plan Withhold Votes
Sears (S) meeting date 5/13/2004
This board has ignored majority votes to declassify the election of directors three separate times (2000, 2002, and 2003) and ignored a majority vote to place any poison pill to shareholder vote in 2002. We are withholding votes from Donald Carty, Alan Lacy, and Hugh Price based on the board's failure to implement shareholder proposals that receive majority votes.
Alaska Air Group (ALK) meeting date 5/18/04
This board has received four consecutive majority votes to allow for simple majority votes, ignored two majority votes to declassify the board (2001 and 2003), and ignored majority votes to expense options and to place any poison pill to shareholder vote in 2003. Based upon the board's lack of responsiveness to majority votes, we will withhold votes from William Ayer, R. Marc Langland, and John Rindlaub.
FirstEnergy (FE) meeting date 5/18/04
This board has ignored three consecutive majority votes to declassify the election of directors, ignored two majority votes to allow simple majority votes (instead of an 80% supermajority requirement), and ignored a majority vote to place any poison pill to shareholder vote in 2003. Based upon the board's lack of responsiveness to majority votes, we will withhold votes from Paul Addison, John Pietruski, Catherine Rein, and Robert Savage.
Gillette (G) meeting date 5/20/04
This board has ignored majority votes to declassify the election of directors for the last two years. We are withholding votes from Edward DeGraan, Wilbur Gantz, James Kilts, and Jorge Paulo Lemann based on the board's failure to implement shareholder proposals that receive majority votes.
Federated Department Stores (FD) meeting date 5/21/04
This board has ignored majority votes to declassify the election of directors on five separate occasions, including the last four years. Last year's vote received over 88 percent support. We are withholding votes from Sara Levinson, Joseph Neubauer, Joseph Pichler, and Karl Von Dey Heyden based on the board's continued failure to declassify its board.
May Department Stores (MAY) meeting date 5/21/04
This board has ignored four consecutive majority votes to declassify the election of directors. We are withholding votes from Helene Kaplan, Eugene Kahn, James Kilts, Russell Palmer, and William Stiritz based on the board's repeated failure to declassify its board.
Qwest (Q) meeting date 5/25/04
A recent survey of pay for performance found Qwest was "one of the worst boards in Corporate America when it comes to fulfilling their fiduciary responsibilities to investors." Management was compensated higher than its peers while returns dropped 14% and the company lost $1.3 billion. Further, in naming the worst boards of 2002, Business Week included Qwest, noting that "the compensation committee — described as 'comatose' by one expert — awarded ex-CEO Joseph Nacchio an $88 million pay package in 2001, one of the worst years in the company's history." Because of this disconnect between pay and performance, we will withhold votes from Philip Anschutz, Thomas Donohue, Jordan Haines, Frank Popoff, and Craig Slater for recent service on Qwest's Compensation Committee. Additionally, as all of these directors were members of the Compensation Committee in 2001 and 2002, we are withholding based upon their past service as well.
Exxon Mobil (XOM) meeting date 5/26/04
Exxon director Marilyn Carlson Nelson was a director at Qwest from 2000 through 2002 where she served on Qwest's Compensation Committee. In naming the worst boards of 2002, Business Week included Qwest, noting that "the compensation committee — described as 'comatose' by one expert — awarded ex-CEO Joseph Nacchio an $88 million pay package in 2001, one of the worst years in the company's history." We will withhold votes from Ms. Nelson for her service on Qwest's Compensation Committee.
Home Depot (HD) meeting date 5/27/04
This board ignored a majority vote to place any poison pill to shareholder vote in 2003. Therefore we will withhold votes from the Home Depot nominees for failure to heed a majority vote.
Albertson's (ABS) meeting date 6/10/04
This board has ignored majority votes to declassify the election of directors on three separate occasions (2000, 2001, and 2002), and ignored majority votes to expense stock options and to allow simple majority votes at last year' s meeting. As a result, we are withholding votes from Pamela Bailey and Teresa Beck based on the board's failure to implement shareholder proposals that receive majority votes.
