Seventh Company to Implement LongView Reform on Executive Severance
Release Date: January 24, 2005
New York, NY Amalgamated Bank's LongView Collective Investment Fund announced today its seventh successful shareholder initiative on golden parachutes. Beginning in January 2005, CSX Corporation (NYSE: CSX) will seek shareholder approval for new severance packages for senior executives that exceed specified limits. The CSX board of directors enacted the change following a winning shareholder vote on a non-binding proposal brought by LongView at the company's 2004 annual meeting. The LongView proposal received 73 percent of the yes-and-no votes cast.
"We are pleased that the CSX board of directors has responded to the concerns of its investors and adopted the proposal," said Amalgamated Bank Corporate Governance Specialist Julie Gozan. "Moderating executive severance payouts is one key element in reining in excessive executive compensation." In accordance with LongView's proposal, any new senior executive severance agreement with benefits that exceed 2.99 times annual compensation of base salary plus bonus must be approved by shareholders.
Seven companies in various sectors, including Corning, NSTAR, AK Steel and Sprint, have adopted LongView's proposal since 2003. CSX is the third major rail company that has implemented golden parachute reform following action by LongView. The investment fund filed the proposal at CSX after securing adoption of the same initiative at competitors Norfolk Southern and Union Pacific. "By advocating this reform industry-wide, we seek to ensure better practices throughout the market," said Gozan. Con Hitchcock, legal counsel for Amalgamated Bank, added, "Management sometimes claims that golden parachute agreements are necessary for attracting and retaining top executives. That argument should now have less force in the rail industry."
Founded in 1923, Amalgamated Bank invests workers' retirement savings through its LongView Funds. With $10 billion in assets under management, LongView works to enhance shareholder value through corporate governance reforms at portfolio companies. Amalgamated Bank is available online at www.amalgamatedonline.com.
