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CWA, IBEW Back New ‘Golden Coffin,’ Corporate Governance Rules at Verizon |
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If I were my own boss, I might not be too critical of my performance or stingy with my pay and benefits. But in the corporate world, if you are the CEO and the chairman of the board, you’re pretty much your own boss.
Today in Louisville, Ky., Verizon shareholders, including members of the Communications Workers of America (CWA) and Electrical Workers (IBEW), are voting on three corporate governance proposals that would:
- Separate the role of chairman and CEO;
- Allow shareholders to pool their votes in director elections; and
- Allow shareholders to decide if an executive deserves a “golden coffin.”
Before this morning’s annual meeting, union and community activists leafleted shareholders urging support for the trio of proposals.
C. William Jones, president of the Association BellTel Retirees, which is sponsoring the CEO/chairman resolution, says:
How can the CEO be his own boss? When the CEO is Chairman of the Board, we believe that lines of accountability get blurred, compensation is less tightly aligned with shareholder returns, and the decision to replace a poorly-performing CEO can be skirted or delayed. We believe that an independent Board Chair is particularly overdue at Verizon. For too many years the compensation of Verizon’s senior executives has been disconnected from returns to shareholders.
Corporate boards of directors are usually pretty chummy and closed groups with few, if any, dissenting voices. The current rules for electing board members help keep it that way, says Greg Kinczewski, IBEW’s corporate governance adviser.
Shareholders should have the right to pool their votes for the election of one or more directors rather than apply their votes to the election of all directors. Known as “cumulative voting,” it would increase the possibility of electing directors with independent views from management. Better shareholder representation on the board at Verizon is long overdue.
Executive “golden parachutes” are old news, but an executive compensation perk that’s not gotten much attention is the “golden coffin”—overly generous posthumous payouts following the death of a senior executive. Verizon shareholders will vote on a proposal that would require shareholders, not just the board, to approve “golden coffin” agreements.
Says Joey McCarty, president of CWA Local 3372 in Lexington, K.Y.:
These golden coffin agreements provide payment without performance. While management claims that these agreements are designed to retain executives, it’s obvious that after an executive is dead you’re not retaining them.
Find out more about executive compensation at the AFL-CIO’s 2009 Executive PayWatch.
2 Comments
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When we have 500,000 overpaid and underbrained ex-execs out looking for a job, then there may be a problem, but saying that they need to pay those millions to hold the execs (most of whom caused the problems in their companies) is a huge load of BS. Let the market and the shareholders set their compensation instead of the CEOs and the Board of Directors. Shareholders have been trying to get the “say on pay” for a long time but they have been stifled and roadblocked in their quest and the blocks of institutional holders will vote whatever the BOD wishes. Since they outnumber the rest of us, the board wins again. I really hope the shareholders can beat the unfair odds! Go for it, and best wishes!
Too Bad the UAW and the CWA/IBEW at AT&T have not done this also… More Power to them. I hope we will hear a positive outcome.