Western Union Drops 5% Proxy Access Proposal

The Shareholder Activist - Western Union Drops 5% Proxy Access ProposalWestern Union Co. (WU) unveiled a proposal to declassify its board structure and said it won’t submit a management proposal for proxy access at its 2012 annual meeting, according to a Dow Jones report. (Western Union Plans To Declassify Board, Drops Proxy Plan, 2/13/2012)

No mention was made about weather or not the company would drop its no-action request on a proxy access proposal submitted by Norges Bank.

Under Western Union’s previously announced proposal, investor groups who hold a 5 percent stake for three years would be able to nominate board candidates to appear on the management proxy statement. The Norges Bank proposal would set a lower threshold for proxy access (a 1 percent stake for one year).

To contact James McRitchie directly, please email jm@corpgov.net

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Posted in Featured, Shareholder Policies & Investor Regulations, Shareholder Proposals | 1 Comment

One Response to Western Union Drops 5% Proxy Access Proposal

  1. “Same Gig, Different Day.”

    On Wall Street it’s all about power and control. And of course money.

    The classified board model, also known as a staggered board, is one in which directors serve overlapping terms and they are placed in different categories. The classified board structure was, in part, designed to delay the immediate takeover of the board by an “outsider.” This is affectionately known as the “delay provision.”

    I have had the distinct pleasure of treating many corporate board members in my practice. They have shared the following observations with me: they don’t like to be told what to do, they enjoy the power they wield, they perceive shareholders as a necessary “evil” which must be controlled, they resent the prospect of a takeover (hostile or otherwise), they relish the status quo, they feel they have earned their privileges, they have some interest in share value but they are more deeply interested in their perks and options, and they acknowledge that “group think” often dominates the board room.

    Most corporations have large legal departments geared toward maintaining power and control for the company, especially the board. Shareholder assets are spent, often with abandon, to insulate and protect the board from proxy access, or any other access for that matter.

    Again, a war of attrition and siege mentality frequently colors the thinking and behavior of the legal department who ultimately reports to the board. “Stacking the deck” is a common corporate tactic which reflects an insular belief system which can limit vision and responsiveness to the myriad of crises that beseech boards all too often. However, when the issue of sustainability is raised (or threatened), other matters do matter. Innovation must rear its much needed head in order to assure the viability of the company. It can be that simple, and that complicated.

    Culture is “culture:” it’s how we do things here. It’s our gig, our shop. “No outsiders (or anyone else for that matter) need apply.”