ISS and Glass Lewis Also Recommend Withholding Support from Four Incumbent Independent Directors
Galen MunroeEmail: [email protected] Phone: (202) 624-6911
(PHOENIX) – The country’s two leading proxy voting advisors, ISS and Glass Lewis, recommend that shareholders of Swift Transportation [NYSE: SWFT] vote for a shareholder proposal sponsored by the International Brotherhood of Teamsters that calls on the company to pursue a plan to recapitalize the company and replace the current dual class stock structure with one that ensures equal voting rights for all shareholders.
Both ISS and Glass Lewis also recommend that Swift shareholders withhold support from the board’s four independent directors standing for election, Richard H. Dozer, David Vander Ploeg, Glenn Brown, and José Cárdenas, at the company’s May 8, 2015 shareholder meeting.
Noting that the directors, as members of the board’s governance committee, failed to act on this proposal last year despite strong majority support by Class A voting shareholders, Glass Lewis questions whether the board’s independent directors are adequately carrying out their duties to outside shareholders. The proposal won 79.2 percent support of Class A shares voted in 2014 or 60.8 percent of all publicly traded shares outstanding.
ISS recommends investors withhold support for the four independent directors who, as members of the board’s audit committee, have failed to protect shareholders from the potential conflicts of interest or financial risk created by the significant pledging of stock by the company’s CEO and controlling shareholder Jerry Moyes. ISS also recommended shareholders withhold support from members of Swift’s audit committee in 2014 for these same concerns.
According to disclosures in the company’s 2015 proxy statement, Moyes and his affiliates have pledged approximately 63 percent of total holdings or approximately 24 percent of the company’s total outstanding shares.
In an April 20 letter to Swift shareholders, Teamsters urge support for the proposal to replace the dual class structure with a one-share, one-vote system and urge investors to withhold support for three of the incumbent directors.
“The inability or unwillingness by the incumbent, independent board members, to rein in the pledging of stock by CEO Moyes reveals significant deficiencies within the company’s governance structure and has created material risk for public shareholders,” said Ken Hall, General Secretary-Treasurer of the Teamsters Union. “We believe the current dual class stock structure, which gives disproportionate voting power and control to a single holder of a minority of the outstanding shares, is the fundamental problem at Swift and must be addressed.”
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 www.teamster.org for more information. Follow us on Twitter @Teamsters and on Facebook at www.facebook.com/teamsters.