Risk & Compliance

Cendant Ends Staggered Board

Similar company proposals in 2000 and 2002 failed to receive the required number of votes.
Stephen TaubApril 23, 2004

Cendant Corp. is yet another company that is changing its policies to accommodate the sentiments of its shareholders.

The New York-based travel and real estate company announced that shareholders approved a company proposal to declassify its board of directors, which means that the entire board will have to face re-election each year. Surprisingly, similar company proposals in 2000 and 2002 failed to receive the required number of votes for approval.

“Our board is committed to maintaining the highest standards of corporate governance and accountability to stockholders,” stated chairman, chief executive officer, and president Henry Silverman. “This is further evidence of the board’s commitment to real action in these important areas.”

That said, two proposals submitted by stockholders were defeated. One measure called for separation of the roles of chairman and CEO; the other sought to limit CEO compensation. Last year Silverman took home $54.3 million, including $37.2 million from option exercises, according to The Wall Street Journal.

Earlier this week Cendant agreed to reduce Silverman’s future compensation by settling a shareholder suit that accused the board of violating fiduciary duties, according to Dow Jones. The settlement still requires the approval of Cendant’s board and the Delaware Chancery Court, added the news service.

Shareholders at the annual meeting also approved the election of five directors. Returning board members include Sheli Rosenberg, who had been opposed by pension plan Calpers because she “is a member of the audit committee that has authorized the auditor to perform non-audit services.” Deloitte & Touche LLP were also ratified as auditors despite Calpers’ opposition.