AFL-CIO Targets 'Derelict' CEO Compensation Committee Directors In New Executive Paywatch Website Highlighting Excessive CEO Pay
April 15 2004 - 5:14PM
PR Newswire (US)
AFL-CIO Targets 'Derelict' CEO Compensation Committee Directors In
New Executive Paywatch Website Highlighting Excessive CEO Pay
www.paywatch.org WASHINGTON, April 15 /PRNewswire/ -- Many
executive pay packages rose dramatically over the last year as a
result of compensation committee directors who approved excessive
deals despite CEOs' poor performance and declines in share prices.
But shareholders are increasingly withholding votes from so-called
"derelict" directors to send a message that overly generous pay
packages must stop. To help restore accountability to the executive
compensation system, the AFL-CIO has launched on its newly updated
Executive Paywatch website, http://www.paywatch.org/, a vote "no"
campaign targeting "derelict" directors at 10 companies where CEOs
received over-the-top pay packages. "We are urging shareholders to
take a proactive approach in stopping runaway CEO pay dead in its
tracks," said AFL-CIO Secretary-Treasurer Richard Trumka.
"Irresponsible directors must be removed to rein in excessive CEO
pay that ultimately robs working families of their retirement
security." The AFL-CIO is urging shareholders to withhold support
from the following directors for approving excessive executive pay:
Michael Miles of American Airlines (NYSE:AMR); William Campbell of
Apple Computer (NASDAQ:AAPL); Myra Biblowit of Cendant (NYSE:CD);
Carol Bartz of Cisco Systems (NASDAQ:CSCO); Richard Parsons of
Citigroup (NYSE:C); John Williams of Clear Channel Communications
(NYSE:CCU); Decker Anstrom of Comcast (NASDAQ:CMCSA); Robert
Spilman of Dominion Resources (NYSE:D); William Tauscher of Safeway
(NYSE:SWY) and Bradley Jacobs of United Rentals (NYSE:URI). The
AFL-CIO's Executive Paywatch website profiles case studies of each
of these directors and the CEO pay decisions made under their
watch. For example, at Dominion Resources, CEO Thomas Capps' total
compensation increased 160 percent in 2003, even though the
company's net income fell by 77 percent. Capps has had an
interlocking directorship with compensation committee director
Robert Spilman, the former CEO of Bassett Furniture where Capps
served on his board in 1997. In the coming year, two proposed
reforms will have a major impact on CEO compensation: The
Securities and Exchange Commission is considering allowing
shareholders to nominate directors for election on company proxy
statements. Secondly, the Financial Accounting Standards Board has
issued a proposed standard that would require companies to begin
expensing stock options next year. Executive Paywatch is also
launching an e-campaign to support stock option expensing.
Executives disproportionately benefit from stock options and this
cost has been kept off the books. Moreover, not expensing stock
options has artificially boosted profit reports, thereby generating
further increases in CEO pay. Visitors to http://www.paywatch.org/
will be encouraged to send a letter to regulators and lawmakers
urging that all stock options be expensed. "While some companies
have begun to restructure their executive compensation system in
the wake of corporate scandals, others have only engaged in window
dressing," said Trumka. "Moreover, some of these reforms were only
adopted after shareholders demanded change." The AFL-CIO represents
more than 13 million working men and women. Union members
participate in the capital markets as individual investors and
through a variety of benefit plans. Union sponsored benefit plans
have a total of more than $400 billion in assets. DATASOURCE:
AFL-CIO CONTACT: Suzanne Ffolkes of the AFL-CIO, +1-202-637-5018
Web site: http://www.aflcio.org/ http://www.paywatch.org/
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