Release Date: May 21, 2004
New York, NY Ingersoll-Rand (NYSE: IR) shareholders will vote today on a proposal calling for an independent board chairman. The proposal, filed by Amalgamated Bank's LongView Investment Funds, seeks to amend the company's bylaws to require a non-management director, who has not previously served as chief executive officer (CEO) of the company, to serve as board chair. The LongView Funds hold 85,572 shares of IR common stock.
"The task of the board is to protect shareholders' interests by providing independent oversight of management, including the CEO," said Amalgamated Bank's Chief Economist Melissa Moye. Corporate governance experts have questioned how one person serving as both chairman and CEO can effectively monitor and evaluate his or her own performance. In January 2003, The Conference Board's Commission on Public Trust and Private Enterprise recommended that the positions of chairman and chief executive be performed by two separate people, and that the chairman be an independent director.
The New York Stock Exchange (NYSE) defines a director as independent if, among other criteria, he or she has not been employed by the corporation or an affiliate at any time in the preceding three years. The LongView Funds use the Council of Institutional Investors (CII) definition, which stipulates a stricter look-back period of five years. Furthermore, according to CII, a director is independent only if his or her sole professional, familial, or financial connection to the corporation or any of its executive officers is his or her directorship.
"Although LongView supports this policy reform across the board, we have particular reason to think that Ingersoll-Rand may benefit from additional outside oversight," said Moye. Ingersoll-Rand's compensation and nominating committees are not 100% independent, she noted, and "these committees provide a vital role in the process of supervising management on behalf of shareholders," concluded Moye.
Ingersoll-Rand will hold its annual shareholder meeting this morning in Davidson, North Carolina.
Founded in 1923, Amalgamated Bank invests workers' retirement savings through its LongView Funds. With $8 billion in assets under management, LongView actively votes its proxies and sponsors shareholder initiatives for corporate reform. Amalgamated Bank is available online at www.amalgamatedonline.com.
