W Post: AFL-CIO Goes After 6 Verizon Directors; Campaign Tests Shareholder Rights

[Omaha Steve]

http://www.washingtonpost.com/wp-dyn/content/article/2007/04/19/AR2007041902367.html

AFL-CIO Goes After 6 Verizon Directors
Campaign Tests Shareholder Rights

By Tomoeh Murakami Tse
Washington Post Staff Writer
Friday, April 20, 2007; Page D01

NEW YORK, April 19 -- The AFL-CIO has launched a campaign to unseat six members of Verizon Communications' compensation committee, saying they rewarded chief executive Ivan G. Seidenberg with generous pay even as the company's stock languished.

The push to organize a "no" vote at Verizon's annual meeting May 3 is among the first efforts by activist shareholders to unseat board members this year, and corporate governance experts say it is a test case for how much influence shareholders could wield in determining the composition of boards of directors at public companies.

This year, more board members than ever before could be vulnerable, not just because of public pressure over executive pay but also because shareholders have pushed companies to change how directors are elected. It is also the first year companies are disclosing more information on how they compensate top executives under new securities regulations.

"Directors are for the first time in memory having to earn their place on the boards -- it's not just a gift," said Stephen M. Davis, a fellow at Yale University's center for corporate governance. "There's a potential for ouster."

Verizon spokesman Peter Thonis said Thursday that the company had responded to "the desire of our shareholders last year and adopted a majority vote standard which is in our bylaws."


FULL story at link.