For Immediate Release
Thursday, June 03, 2010
AFSCME Employees Pension Plan Applauds Appointment of Independent Chairman at Fifth ThirdWashington, DC —
The AFSCME Employees Pension Plan (“the AFSCME Plan”) applauds the appointment of an independent chairman of the board at Fifth Third Bancorp (NASDAQ: FITB) on May 28. William Isaac was named chairman of the board, replacing CEO Kevin Kabat, who held both positions.
“Fifth Third’s appointment of an independent chairman to lead its board is good news for shareholders,” said AFSCME Pres. Gerald W. McEntee, who chairs the AFSCME Plan. “Separating the chairman and CEO positions avoids the fundamental conflict of interest that occurs when the CEO is the chairman, and therefore is in charge of supervising himself. The board of Fifth Third has responded to the concerns of shareholders.”
The AFSCME Plan proposed an independent chairman at Fifth Third Bancorp’s annual meeting in April. The proposal received support from almost one-third of shareholders. The prevalence of an independent chairman rose to 49 percent among S&P 1500 firms in 2009, from 46 percent in 2007, according to RiskMetrics Group data.
Yale University’s Millstein Center for Corporate Governance and Performance and The Conference Board have endorsed the policy of an independent chairman. “The global financial crisis underscored the need for effective board oversight to rein in excessive risk-taking by executives, added McEntee. “These firms are too large and too complex to be run by a combined CEO and chairman.”