Release Date: August 3, 2004
New York, NY-Corning Incorporated (NYSE: GLW) has announced a change in policy whereby it will seek shareholder approval for future senior executive severance packages that exceed certain limits. Corning's board of directors enacted the change in response to a winning shareholder vote on a proposal brought by Amalgamated Bank's LongView Collective Investment Fund at the April 29th annual meeting.
LongView's proposal asked for shareholder review of future senior executive severance agreements, commonly known as "golden parachutes." Corning's compensation committee and board of directors considered and adopted the policy on July 21, 2004. The shareholder review process will occur for any new senior executive severance agreement with benefits that exceed 2.99 times annual compensation of base salary plus bonus. Corning is the fifth company to adopt LongView's parachute proposal since 2003.
"We are pleased that Corning's board of directors has responded to the concerns of its investors and adopted the proposal," said Amalgamated Bank Corporate Governance Specialist Julie Gozan. "By enacting this reform, Corning has implemented a mechanism that can moderate executive severance payouts." LongView filed the proposal at Corning following the 2002 award of a $10 million severance package to a former CEO of the company.
The LongView proposal received 65 percent of the yes-and-no votes cast, making it the first shareholder proposal to ever receive a majority vote at Corning.
This is the second golden parachute policy that has been implemented this year following action by the LongView Funds. NSTAR adopted a reform prior to its annual shareholder meeting, prompting the Funds to withdraw the resolution. In 2003, Union Pacific, Sprint, and AK Steel adopted similar LongView proposals. LongView is one of the leading advocates for this executive compensation reform.
The LongView Funds currently own 586,000 shares of Corning common stock.
Founded in 1923, Amalgamated Bank invests workers' retirement savings through its LongView Funds. With $9 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.
