Tom
05-09-2002, 08:32 AM
Mentor Graphics Shareholders Strongly Endorse Shareholder Voting Requirement For Stock Option Plans
NEW YORK, May 8 /PRNewswire/ -- TIAA-CREF announced today that shareholders of Mentor Graphics strongly supported a CREF shareholder resolution asking that all material stock option plans be submitted to shareholders for approval. The resolution was approved, winning support from 57.2% of the shares voted (excluding abstentions), according to a preliminary count. CREF is the equities arm of TIAA-CREF, a financial services organization with approximately $275 billion of assets under management. The vote took place on May 7 at the Mentor Graphics annual meeting in Wilsonville, Oregon.
"Mentor shareholders have clearly endorsed a return to the traditional view that all material stock option plans should be submitted to shareholders for their approval," said Peter Clapman, TIAA-CREF senior vice president and chief counsel, Corporate Governance. "We believe this is a record vote on a first-ever shareholder proposal. The vote is an unmistakable sign that investors are unhappy with the trend toward company implementation of highly dilutive equity compensation plans without approval from shareholders."
Clapman observed that the results at Mentor were a "clarion call" to the New York Stock Exchange, NASDAQ and the SEC to craft much stricter shareholder approval requirements for stock option plans. He noted that the results were particularly striking because it is assumed that managers and employees of Mentor, who are the beneficiaries of these plans and who have significant shareholdings, voted against the resolution. "The very high percentage of support from other shareholders demonstrates that the corporate governance concerns raised are perceived as extremely important by the investing public and as a proper issue for shareholder action."
In all, CREF submitted shareholder resolutions on this issue to 13 companies. Four resolutions were withdrawn when the companies agreed to implement the requested policy, and discussions continue with four other companies, where the proposal also was withdrawn. In four other cases, the SEC staff allowed the companies involved to omit the resolution, concluding that the matters involved were "ordinary business." TIAA-CREF is appealing the decision to the full commission.
"We appreciate the willingness of Mentor Graphics, in contrast to several other companies, to allow an advisory vote on this issue to go forward," said Clapman. "We hope that the Mentor board of directors, as well as the boards of all companies that implement dilutive option plans without shareholder consent, will take the vote to heart and submit all future equity compensation plans for shareholder approval, as most companies do." The SEC estimates that only about 20% of companies with equity compensation plans have instituted programs not approved by shareholders, but the number appears to be growing.
CREF submits shareholder resolutions annually on selected issues of corporate governance. This year, in addition to the Mentor Graphics resolution, proposals will come to votes at PRG-Schultz International, on May 15, concerning the company's dead-hand poison pill; and at American Power Conversion, on June 11, requesting a policy of board and committee independence.
TIAA-CREF, with approximately $275 billion in assets under management, is the premier pension system for people employed in education and research in the U.S., serving over two million participants at more than 11,000 institutions. The organization is widely recognized as a major voice for shareholder rights and improved corporate governance. In addition to providing pensions, the TIAA-CREF group of companies offers after-tax annuities, mutual funds, life and long-term care insurance and trust services to the general public. TIAA-CREF Tuition Financing, Inc., a subsidiary of TIAA, manages 13 state-sponsored college savings plans, more than any other company.
For further information, please contact Patrick Connor, TIAA-CREF Media Relations, Tel. (212) 916-5769; email: pconnor@tiaa-cref.org
NEW YORK, May 8 /PRNewswire/ -- TIAA-CREF announced today that shareholders of Mentor Graphics strongly supported a CREF shareholder resolution asking that all material stock option plans be submitted to shareholders for approval. The resolution was approved, winning support from 57.2% of the shares voted (excluding abstentions), according to a preliminary count. CREF is the equities arm of TIAA-CREF, a financial services organization with approximately $275 billion of assets under management. The vote took place on May 7 at the Mentor Graphics annual meeting in Wilsonville, Oregon.
"Mentor shareholders have clearly endorsed a return to the traditional view that all material stock option plans should be submitted to shareholders for their approval," said Peter Clapman, TIAA-CREF senior vice president and chief counsel, Corporate Governance. "We believe this is a record vote on a first-ever shareholder proposal. The vote is an unmistakable sign that investors are unhappy with the trend toward company implementation of highly dilutive equity compensation plans without approval from shareholders."
Clapman observed that the results at Mentor were a "clarion call" to the New York Stock Exchange, NASDAQ and the SEC to craft much stricter shareholder approval requirements for stock option plans. He noted that the results were particularly striking because it is assumed that managers and employees of Mentor, who are the beneficiaries of these plans and who have significant shareholdings, voted against the resolution. "The very high percentage of support from other shareholders demonstrates that the corporate governance concerns raised are perceived as extremely important by the investing public and as a proper issue for shareholder action."
In all, CREF submitted shareholder resolutions on this issue to 13 companies. Four resolutions were withdrawn when the companies agreed to implement the requested policy, and discussions continue with four other companies, where the proposal also was withdrawn. In four other cases, the SEC staff allowed the companies involved to omit the resolution, concluding that the matters involved were "ordinary business." TIAA-CREF is appealing the decision to the full commission.
"We appreciate the willingness of Mentor Graphics, in contrast to several other companies, to allow an advisory vote on this issue to go forward," said Clapman. "We hope that the Mentor board of directors, as well as the boards of all companies that implement dilutive option plans without shareholder consent, will take the vote to heart and submit all future equity compensation plans for shareholder approval, as most companies do." The SEC estimates that only about 20% of companies with equity compensation plans have instituted programs not approved by shareholders, but the number appears to be growing.
CREF submits shareholder resolutions annually on selected issues of corporate governance. This year, in addition to the Mentor Graphics resolution, proposals will come to votes at PRG-Schultz International, on May 15, concerning the company's dead-hand poison pill; and at American Power Conversion, on June 11, requesting a policy of board and committee independence.
TIAA-CREF, with approximately $275 billion in assets under management, is the premier pension system for people employed in education and research in the U.S., serving over two million participants at more than 11,000 institutions. The organization is widely recognized as a major voice for shareholder rights and improved corporate governance. In addition to providing pensions, the TIAA-CREF group of companies offers after-tax annuities, mutual funds, life and long-term care insurance and trust services to the general public. TIAA-CREF Tuition Financing, Inc., a subsidiary of TIAA, manages 13 state-sponsored college savings plans, more than any other company.
For further information, please contact Patrick Connor, TIAA-CREF Media Relations, Tel. (212) 916-5769; email: pconnor@tiaa-cref.org