Release Date: Apr 18, 2003
SALT LAKE CITY, UT The shareholders of Union Pacific Corporation (NYSE: UNP) decided with a majority vote of 56% at today's annual meeting to urge a shareholder review of certain severance agreements with senior executives. The Amalgamated Bank LongView Fund proposal targets future executive severance agreements, also known as "golden parachutes," that, when triggered, would provide benefits in an amount exceeding 2.99 times the sum of the executive's base salary plus bonus.
Union Pacific has entered in a series of severance agreements that provide compensation to its most senior executives in various situations after a change of control of the company. These severance packages would pay three times the sum of an executive's base pay and incentive pay for Chairman Richard K. Davidson and President Ivor J. Evans, as well as other payments and benefits, including payment by the company of any federal excise tax that may be imposed on payments made under the agreements.
The severance agreements currently in place for eligible Union Pacific executives allow them to receive payment if they are involuntarily terminated or constructively discharged within two years after a "change in control," which is defined to include the acquisition of over 20% of the company's common stock by a third party and various other situations, as specified in the agreements.
"We think these often lucrative packages should go through a process of shareholder approval," explained Melissa Moye, Chief Economist of Trust and Investment Services for Amalgamated Bank. "Clearly, other shareholders think similarly. Now it is up to the Union Pacific board to adopt a resolution enacting the proposal." Votes cast for the measure were 126 million, with 96 million cast against. This is the fourth shareholder proposal on this topic to receive shareholder approval during the past two years--the others have been at Norfolk Southern, Bank of America and Tyco. With approximately 56% voting for the Union Pacific proposal, it appears to be the second highest vote total for a proposal to submit golden parachutes to a shareholder vote.
The Amalgamated Bank LongView Fund owns over 83,000 Union Pacific shares. The fund is managed by Amalgamated Bank, which provides trustee, investment advisory and custodial services to employee benefit plans. Assets under management total $6 billion.
See also: "Union Pacific Stockholders Vote to Restrain Golden Parachutes"
By Paul Foy, Associated Press
04/18/03
"Executive Compensation Reflects Record Year for Union Pacific"
By Grace Shim, Omaha World-Herald
03/10/2003
