Risk & Compliance

Gillette Dissidents Press Harder

This year's vote marks three consecutive years of growing support for a resolution to eliminate the company's staggered board.
Stephen TaubMay 21, 2004

A resolution calling for the annual election of the Gillette Co.’s board of directors received support from 68 percent of the shares voted at Thursday’s annual meeting.

The measure, which was led by Christian Brothers Investment Services Inc. and activist investor Walden Asset Management, urged the company to abandon its staggered board under which shareholders can vote on only one-third of the directors in any given year.

The activist groups noted that the vote marked the third consecutive year of growing support for the resolution. In 2003, 63.6 percent of shareholders voted to eliminate the staggered board; in 2002, 55.7 percent supported a similar measure.

“Good corporate governance demands that Gillette and other companies make sure that all of their directors face the verdict of shareholders on an annual basis,” said John K.S. Wilson, a Christian Brothers director, in a statement. Proxy research firm Institutional Shareholder Services also supported the proposal and called the Gillette board “unresponsive” because the company failed to abide by the earlier majority votes.

Shareholders did approve the four directors facing re-election to three-year terms: Edward F. DeGraan, Wilbur H. Gantz, James M. Kilts, and Jorge Paulo Lemann.

Shareholders also rejected a proposal that the company immediately expense stock options. The company has announced that it will expense options when the Financial Accounting Standards Board agrees on a uniform method.