General Motors shareholders blasted CEO Rick Wagoner for raking in huge salaries and bonuses while the automaker has struggled financially, but a proposal to give investors a say on executive pay was soundly defeated on Tuesday.
Shareholders also defeated a proposal under which at least 75 percent of future stock options and restricted stock awards for senior executives would be tied to the company's performance.
John Lauve of Holly, Mich., who sponsored the proposal on performance pay, said GM's market share, stock price and credit rating have decreased in recent years, but management and directors have not been held accountable.
"We either need to change this company or have the Japanese come in and run the whole place," said Lauve, whose proposal received only16 percent support in preliminary voting results.
The proposal to give shareholders an annual advisory vote on executive compensation fared better, receiving almost 32 percent support, but fell fall short of passage. The sponsor of the proposal,John Chevedden of Redondo Beach, Calif., said the company successfully blocked an effort to have a similar measure put to a vote at last year's annual meeting.
"It's long overdue, especially given the results this year of our company," Chevedden said, referring to GM's $38.7 billion loss in2007.
According to an Associated Press calculation, Wagoner received compensation valued at $15.7 million for 2007, up 64 percent from the previous year.
"I came to scold you for your greed," Mary Ann Wiley of Seattle told Wagoner.
Wiley, 77, said she has owned GM stock for 70years, but that Tuesday marked her first annual meeting. Wiley said afterward that GM has moved far too slowly in developing new and better products and embracing next-generation fuels, and that management should not receive higher salaries and bonuses when the company is struggling.
"If the company does not do well, management should take an equal hit, and I don't think they've taken an equal hit," she said, adding that GM has grown so big that it has lost its humility and its "sense of democracy," not caring about shareholder concerns.
"This was a charade," said Wiley, looking out over the ornate Gold Ballroom of the Hotel DuPont, where GM has held its annual meetings for more than a decade.
"I would suggest they have a stockholder meeting at a factory," she said. "They don't need to rent the DuPont hotel."
Meanwhile, Farhad Irani of Wilmington urged GM to look to emerging markets such as China, India and Brazil to diversify its14-member board, which is predominantly white men.
"Since you are trying to increase your sales around the world,how about trying to get some people from around the world into the board?" he said.Other shareholder proposals defeated Tuesday included efforts to force GM to disclose more information about direct and indirect political contributions, develop a plan to reduce greenhouse gas emissions, and adopt principles for comprehensive health care reform.
A proposal recommending that the board adopt cumulative voting for shareholders received a bare majority of 50.5 in preliminary voting. Wagoner said the measure would be directed to the board's corporate governance committee for review.
A similar measure was approved by shareholders in 2006 but has yet to be adopted. The company said it's unclear how cumulative voting would work in tandem with majority voting, which the company's board adopted in 2006.
Majority voting requires directors to be elected by a majority of the votes cast, not just a plurality, while cumulative voting would allow individual shareholders or groups of shareholders to pool their votes and cast them for a specific candidate.
Supporters say that would give shareholders more of a voice in corporate governance.
"This is an easy, painless way to turn our company around,"Chevedden said.
http://www.autonews.com/article/20080603/ANA02/823955249/1078 (subscription only)
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