February 22, 2006

SuperValu and Gannett Restate Bylaws to Allow for Majority Voting

Add SuperValu and Gannett to the list of companies that have adopted a pure majority voting standard for director elections. They follow in the footsteps of Intel and Dell in recent weeks. Here is SuperValu’s Form 8-K that describes this change; Gannett hasn’t yet filed this change with the SEC, but here is a copy of the company’s restated bylaws (see Article II, Section 6). Interestingly, Gannett adopted a director resignation guideline a few months ago and has now taken this additional step.

As promised, we have announced a new webcast – “Practical Considerations: Implementing a Majority Vote Standard” – during which a panel with “real life” experience will educate us on how to implement a majority vote (and related) standard. You know, the practical stuff – we will leave the debating over whether the majority vote standard is a good idea or not for the academics (although former Chief Justice Veasey will provide an overview of that debate when he discusses the ABA’s report). Representatives from Intel and Dell will tell their stories; as well as Pfizer and Paychex. I am pretty excited about this one!

As an aside, it’s not surprising how much confusion exists over precisely what is a majority vote standard. For example, this article claims that Nike has changed its plurality standard – but I believe Nike merely has adopted a director resignation policy that overlays a plurality standard. Hard to tell since Nike has not made any related SEC filing nor provided any other information on its website – but many of the articles on this subject tell conflicting stories. I don’t blame the reporters as the concept of plurality voting doesn’t exist in our political framework.

Draft of Final Report from SEC’s Small Business Advisory Committee

Yesterday, the SEC’s Advisory Committee on Smaller Public Companies held one of its last meetings to consider a 165-page draft of its final report. Here are the audio archive and written statements related to yesterday’s meeting – and here are comments submitted in response to the original questions posed by the Committee.

Getting Fired? Not a Bad Deal if You’re a CEO

Ethics matter. That supposedly is the gist of the story of the RadioShack CEO being forced to resign. But Floyd Norris of the NY Times provides the gory details in this article about how the board arguably hasn’t done its job to protect the company and shareholders. This Form 8-K includes a copy of the CEO’s resignation agreement.

The departing CEO not only will receive $1 million in quarterly payments – but he has one year to exercise his 1.63 million options (which are underwater today); all in exchange for a 18-month noncompete. This from a company that may very well cease to exist before the 18-month period expires. And you wonder why the company desperately seeks a turnaround? If you or I got fired, I guarantee you that we wouldn’t even get that nice watch.

[My Olympic beef – If I never see Bob Costas again, I will survive. What is with NBC trying to break down our athletes so that they go negative. Enough with trying to create a Shani/Chad war, prodding Apolo Anton Ohno to whine that he “only” got bronze, or condemning Lindsey Jacobellis for “settling” for a silver? Lord knows what they will do to Sasha if she falls tomorrow. These people don’t even get paid – they truly love their sport! I would like to strap all those NBC suits who think that this negative attitude is what the American public wants to hear into a luge and let her rip…]