Risk & Compliance

Safeway Directors Safely Through

A number of pension funds hold the chairman and CEO responsible for the erosion of $20 billion in the company's stock value over the past five years.
Stephen TaubMay 21, 2004

So much for the shareholder revolt at Safeway Inc.

Despite high-profile recommendations to withhold votes for key directors facing re-election, shareholders withheld just 16.7 percent of the votes for chairman and chief executive officer Steven Burd at Thursday’s annual meeting, according to the Associated Press. In addition, investors withheld just 15 percent of their votes for directors Robert MacDonnell and William Tauscher, according to Bloomberg, which cited the company as its source.

In late March, five pension funds — which hold Burd responsible for the erosion of $20 billion in the company’s stock value over the past five years — announced that they would withhold votes from the three board members. Burd, MacDonnell, and Tauscher were the only board members on the ballot at the company’s annual meeting since the grocery giant has a staggered board of directors.

Although the campaign to oust Burd — led by Institutional Shareholder Services; Glass, Lewis & Co.; the New York State Common Retirement Fund; and a number of other pension funds — may have fallen short of expectations, activists are still claiming a victory of sorts.

“Regardless of the size of the vote, we accomplished a lot,” Maria Grove, a spokeswoman for the Connecticut Retirement Plans and Trust Fund, told Bloomberg. “We got the word out. Our position was endorsed by two major proxy advisors, and Safeway has already taken steps to reform its corporate governance.”

“I think a double-digit number sends a message,” David Dietze, president of New York-based Point View Financial Services and a Safeway shareholder, told the wire service. “People are fed up.”

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