Press Releases

Teamsters Warn: Swift Transportation Board Lets CEO Pledge nearly 25 Percent of Outstanding Shares as Collateral for Personal Loans

(Washington, D.C.)  ISS, the country’s largest proxy voting advisory firm, issued a report yesterday recommending that shareholders withhold votes from all members of the Swift Transportation Company [NYSE: SWFT] Board of Directors’ Audit Committee over concerns about the CEO’s extensive pledging of stock. 

ISS cites concerns over the material risk and potential conflicts of interest created by pledging the shares, and notes the audit committee’s responsibility to oversee the management of enterprise and financial risks as well as potential conflicts of interest. Swift Transportation will hold its annual meeting of shareholders on May 8 in Phoenix, Ariz.

In a letter ( dated March 14 sent to the board’s independent chairman and audit committee member William Post, Teamsters General Secretary Treasurer Ken Hall urged immediate board action to protect the interests of public shareholders from the risks associated with the excessive pledging of stock by Swift’s founder, CEO and controlling shareholder Jerry Moyes by prohibiting any future stock pledging.

The letter states, “The Board’s current policy gives employees or directors the opportunity to pledge up to 20 percent of their family holdings. Moyes and various “Moyes Affiliates” have not only pledged shares up to that amount—just over 12 million shares – for a variety of personal loans, but also pledged an additional 23.8 million shares of Class B common stock (representing $262.3 million in value of shares of Class A common stock) to an unaffiliated trust as part of a Stockholder Offering entered into at the time of the 2010 Initial Public Offering (IPO).  Any or all of the pledged shares could be converted into Class A common stock as of December, 2013….In all, Moyes and the Moyes Affiliates have pledged a total of 35.8 million shares, or nearly two-thirds of his entire equity stake in the company and approximately 25 % of the total outstanding shares.”

“Allowing the company’s CEO and controlling shareholder Jerry Moyes to gamble nearly 25 percent of Swift’s total outstanding shares as collateral for his personal loans is indefensible,” Hall said. “It is vital that this board exercise its independence and authority to protect the interests of public shareholders.”

The company’s financial statements also identify Moyes’ substantial ownership interests in and guarantees to other businesses as a material risk to investors given his exposure to potential lawsuits or liabilities.  According to the company’s 2012 annual report, Moyes has given “personal guarantees to lenders to the various businesses and real estate investments in which he has an ownership interest and in certain cases, the underlying loans are in default and in the process of being restructured and/or settled.  If Mr. Moyes is otherwise unable to settle or raise the necessary amount of proceeds to satisfy his obligations to such lenders he may be subject to significant lawsuits.”

Investors have become increasingly concerned by pledging of stock in light of recent events at Chesapeake Energy and Green Mountain Coffee in which margin calls forced the founders of each company to sell significant quantities of stock they had pledged—dramatically hurting the companies and their other investors.

The Teamsters’ letter also urged improved disclosures about the board’s process for authorizing related party transactions.

The letter notes, “In the last three fiscal years, related party transactions between Swift and Moyes-controlled business have exceeded $36 million.  Coupled with the fact that these other entities may compete for business with Swift, the relationships pose material risks to investors, as acknowledged in the company’s financial statements.”

Related party transactions have long been a concern at Swift. In 2003, a Teamster proposal calling for an independent chairman of the board at Swift received majority support by outside investors after the Teamsters highlighted the massive web of interlocking financial dealings between Swift and other Moyes-owned businesses. 

In 2004, the U.S. Department of Justice and SEC launched an investigation into suspected insider trading by Moyes at Swift. He announced he would step down as president immediately, resign as CEO by the end of 2005 and give up some of the powers of being chairman. In 2005, Moyes paid $1.5 million in disgorgement, prejudgment interest and penalties to settle the SEC insider trading investigation at Swift and resigned from all of his leadership positions. He took the company private in 2007 and then public again in 2010—this time with a dual class stock structure, providing himself 54.5 percent of the voting power for his 40.4 percent holdings of common stock.

“There needs to be meaningful board oversight and management accountability even at a controlled company like Swift,” Hall said. “Someone needs to tell Jerry Moyes to stop using Swift’s corporate coffers as his own personal piggy bank.”

Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women throughout the United States, Canada and Puerto Rico. Visit for more information. Follow us on Twitter @Teamsters and “like” us on Facebook at