Maytag shareholder attempts to disqualify board members

Maytag shareholder attempts to disqualify board members
 
Date March 03, 2005
Section(s) Local News
Brief  
 
By DAVID PITT

Associated Press Writer

DES MOINES — Maytag Corp. shareholders pushing for annual election of all board members have been rebuffed again in a letter filed with the Securities and Exchange Commission.

In the letter filed Jan. 14, Maytag attorney Elliott Stein informed the SEC that the company would exclude the proposal from its agenda at this year’s upcoming shareholders’ meeting.

The California Public Employees’ Retirement System, which owns 300,000 shares, or 3.7 percent, of Maytag stock, has been pushing for the election change for the past three years.

It’s a matter of corporate accountability, according to CalPERS, and support for annual elections is growing.

Last year, 66 percent of Maytag‘s shareholders voted for an annual election of the entire board. In 2003, 59 percent supported the change. In 2002, 55 percent of shareholders supported it.

Each time, Maytag board members have said annual elections are not in the best interest of the company or its shareholders.

Maytag‘s current system of electing a third of the board each year to staggered three-year terms safeguards the company against an unsolicited third-party takeover and ensures a continuity of experience and institutional knowledge, CEO Ralph Hake said last year.

In its request this year, CalPERS planned to ask shareholders to disqualify board members who oppose the annual elections.

“We believe any direction that ignores such overwhelming votes of the company’s shareholders is not fit for re-election and is not qualified to serve as director of the company,” said the letter from CalPERS attorney Peter Mixon.

Stein said the request left the board little choice.

“It is clear … that the intent of the proponent is to use this outcome to coerce directors into … disqualifying themselves from renomination,” Maytag attorney Elliott Stein wrote.

Maytag also filed a request to exclude a proposal by shareholder Nick Rossi, of Boonville, Calif., who wants a shareholder vote required before the board can take a so-called poison pill action. Such actions are taken as preventive measures against unwanted takeovers.

About 60 percent of shareholders have voted in favor of the proposal every year since 2001, but the board has declined to accept it.

Rossi said in a letter to the company that the poison pill entrenches current management and could damage stock value.

Maytag stock, selling for $32.21 a share in April, has been trading at less than half that in recent weeks. Shares closed Wednesday at $14.85, down 25 cents, on the New York Stock Exchange.

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