CtW Investment Group: WaMu Board Should Demand Resignation of Directors Who Fail to Win a Majority
WASHINGTON, April 14 /PRNewswire/ -- Citing preliminary vote tallies, the CtW Investment Group sent a letter to the WaMu Board demanding that they request the resignation of any Directors who fail to win a majority vote, excluding broker votes, at tomorrow's annual meeting. The Group also announced that its Research Director, Richard Clayton, would be in Seattle to attend the meeting.
"Reports that WaMu spurned a takeover offer from JPMorgan in favor of a TPG deal that permits current management to stay in place underscore the need for a strong, independent and accountable Board that will put shareholder interests first," said CtW Investment Group Executive Director William Patterson. "Washington Mutual Directors must not hide behind broker votes to improperly seat Directors who do not win the support of the shareholders." The CtW Investment Group has urged shareholders to withhold from Directors Mary Pugh and James Stever based on their respective failures to independently oversee risk and maintain the link between pay and performance.
Under current NYSE rules, brokers may vote on behalf of certain shareholders in director elections. Last year such votes accounted for over 19% of the total at Washington Mutual. Given their potential to distort election results, the NYSE has attempted to change its rules to eliminate broker votes in director elections, but the SEC has so far failed to act on the proposal. CtW Investment Group Letter: Mr. William G. Reed April 14, 2008 Dear Mr. Reed: Preliminary tallies indicate that one or more Directors may not win majority shareholder support at tomorrow's annual meeting. To ensure the integrity of the election, we call on the Washington Mutual Board to promptly request the resignation of any Director who fails to win a majority vote, excluding broker votes. As you know, the CtW Investment Group has urged shareholders to withhold from Directors Mary Pugh and James Stever at tomorrow's meeting based on their respective failures to independently oversee risk and maintain the link between pay and performance. The American Federation of State, County and Municipal Employees has urged shareholders to withhold from Mr. Stever and others on the Human Resources Committee. With early returns showing high withholds, we fear the Board may rely on "phantom votes" - those cast by brokers exercising discretion over uninstructed client shares - to improperly seat defeated Directors. We estimate that such votes accounted for 19% of the votes cast in the company's 2007 director election. Reports that WaMu spurned a takeover offer from JPMorgan in favor of a TPG deal that permits current management to stay in place further underscore the need for a strong, independent and accountable board that will put shareholder interests first. Last proxy season, when CVS/Caremark Director Roger Headrick faced withholds of over 50% once broker votes were excluded, he promptly resigned his position. WaMu shareholders expect similar accountability. My colleague Richard Clayton will be at the meeting tomorrow to receive word of the election results. We call on you to disclose detailed results of the Director elections, including the number of broker votes, at tomorrow's meeting, and to request the resignation of any Director who fails to win a true majority. Sincerely, CC: Kerry Killinger, Chairman and CEO This is not a proxy solicitation and no proxies will be accepted.
CONTACT: Per Olstad, +1-202-340-3845, or Richard Clayton, Web Site: http://www.ctwinvestmentgroup.com/ NOTE TO EDITORS: A copy of the letter is above. For further information, see www.ctwinvestmentgroup.com. For comment on Monday, April 14 call Per Olstad at (202) 340-3845. For comment at tomorrow's meeting, call Richard Clayton at (202) 255-6433.
2008-04-14 19:42:26 0335467 PRNEWSWIRE
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