Press Releases
Teamsters Urge Investor Support for Executive Pay Safeguard at Allegiant Travel Co.
(WASHINGTON) – The International Brotherhood of Teamsters, a long-term investor of Allegiant Travel Company [NASDAQ: ALGT] urges fellow shareholders to vote FOR Item #3 on the company’s proxy—a proposal that would help prevent unearned windfall awards being paid to executives in the event of a change of control. The shareholder proposal will be presented at the company’s annual meeting, which will be held June 18, 2015, in Las Vegas.
The proposal calls on the company’s board to adopt a policy that makes clear that equity awards granted to senior executives will not automatically, fully vest in the event of a change of control.
Allegiant has entered into at least one agreement that, under certain conditions, guaranteed a senior executive receive accelerated vesting of all unearned equity grants.
According to the company’s proxy statement, former COO and President Andrew C. Levy was guaranteed the immediate vesting of any unvested equity grants under a termination without cause, resignation for good reason or change in control. Indeed, when Levy resigned on October 1, 2014, he was entitled to the accelerated vesting of stock and options valued at $8.5 million. The company opted to pay him in cash to cancel the equity awards.
Investors have become increasingly unpersuaded that executives “deserve” to be guaranteed to receive all unvested awards. Similar proposals won majority support by voting shareholders last year at Boston Properties, Dean Foods, Gannett, and Valero Energy, and this year at First Merit.
Major corporations, including: Apple, Chevron, ExxonMobil, IBM, Intel, Microsoft and Occidental Petroleum, have limitations on accelerated vesting of unearned equity, such as providing pro rata awards or simply forfeiting unearned awards.
Research from James Reda & Associates found that over one-third of the largest 200 companies now pro rate, forfeit or only partially vest performance shares upon a change of control.
In addition to Allegiant, the Teamsters has submitted shareholder proposals on accelerated vesting at Mack Cali Realty, Con-way, Waste Management, Abercrombie and Fitch, Gannett and United Natural Foods.
Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women throughout the United States, Canada and Puerto Rico, including approximately 500 Allegiant Air pilots. Visit www.teamster.org for more information. Follow us on Twitter @Teamsters and “like” us on Facebook at www.facebook.com/teamsters.