Peabody Shareholders Vote Third Time for Reform

by James Parks, May 3, 2007

Shareholders of Peabody Energy this week voted overwhelmingly for the third straight year in support of a resolution sponsored by the AFL-CIO calling for the annual election of the company’s board of directors.

Seventy-nine percent of Peabody’s shareholders voted for the resolution. A similar measure was approved by 75 percent of shareholders last year and 71 percent the year before that. Peabody so far has failed to implement it.

The board of Peabody, the world’s largest private coal company, is divided into three classes, with some one-third of all directors elected each year to three-year terms. The AFL-CIO, through its Office of Investment, is leading a campaign to give shareholders a bigger say in the nomination and election of company directors. This would be a critical step toward making boards of directors more accountable to shareholders.

Peabody’s refusal to accept annual election of directors is swimming against the corporate tide. As of last year, according to the St. Louis Post-Dispatch, a majority of the Standard & Poor’s 500 companies held annual director elections.

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