CAMBRIDGE, Mass.--(BUSINESS WIRE)--The Nathan Cummings Foundation (the "Foundation") and the American Corporate Governance Institute (the "ACGI") are pleased to announce their success in contributing to board declassification in seven S&P 500 companies.
During the 2010-11 proxy season the Foundation, with the assistance of the ACGI, submitted shareholder proposals to repeal the classified boards of a number of companies for a vote at their 2011 annual meetings. The Foundation and the ACGI subsequently negotiated and reached agreements with six companies, pursuant to which each company will bring a management proposal to declassify its board of directors. In addition, following the submission of one of the Foundations’ proposals (to Watson Pharmaceuticals, Inc.), the company announced a plan to bring a declassification proposal to a vote at its 2011 annual meeting. The declassification of the boards of these seven companies would bring about a 5% reduction in the number of S&P 500 companies with a classified board.
The seven companies at which the Foundation’s and ACGI’s work is expected to be followed by a management declassification proposal (and the annual meeting at which the proposal is expected to be voted upon) are as follows:
- Baxter International Inc. (NYSE: BAX) (2011 annual meeting);
- CME Group Inc. (NASDAQ: CME) (2012 annual meeting);
- Eaton Corporation (NYSE: ETN) (2011 annual meeting);
- Dr Pepper Snapple Group, Inc. (NYSE: DPS) (2012 annual meeting);
- Hospira, Inc. (NYSE: HSP) (2012 annual meeting);
- Life Technologies Corporation (NASDAQ: LIFE) (2011 annual meeting); and
- Watson Pharmaceuticals, Inc. (NYSE: WPI) (2011 annual meeting).
"We commend these seven companies for their responsiveness to the concerns underlying our board declassification proposals," said Lance E. Lindblom, President and Chief Executive Officer of the Nathan Cummings Foundation. "Having directors stand for elections annually makes directors more accountable to shareholders, and could thereby contribute to improving performance and increasing firm value."
"We are pleased that our work on behalf of the Foundation has contributed to board declassification in these S&P 500 companies," stated Lucian Bebchuk, President of the ACGI. "Shareholder support for board declassification is consistent with empirical studies indicating that classified boards could be associated with lower firm valuation and worse corporate decision-making."
The Nathan Cummings Foundation is a charitable foundation and an institutional shareholder, and submits shareholder resolutions on issues that lie at the intersection of its programmatic interests and long-term shareholder value.
The American Corporate Governance Institute, LLC is a research and advisory organization that seeks to contribute to improving corporate governance and accountability in publicly traded companies.