Employee Advocacy Group Demands Separation of Chair, CEO Roles at 9 Large Publicly-Traded Companies
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The American Federation of State, County and Municipal Employees has filed proxy proposals in an effort to separate the roles of chief executive officer and chairman of the board at nine large public companies.
In the past, unions and stakeholders have pleaded for an independent chairman at many companies, but have won only in a few circumstances. Reuters believes this year may be different as the group is now targeting more companies than ever. The U.K. already has laws in place which prohibit one person from assuming both roles.
Arguments for the separation of the two roles include the shareholders ability to complain about the CEO’s performance to someone except for the CEO himself and the equal separation of power within the company itself.
Lisa Lindsley, director of capital strategies at the American Federation of State, County and Municipal Employees Union, stated the separation would place some checks and balances on chief executive officers. "The financial crisis shows there hasn't been enough adult supervision of CEOs," she said.
The nine companies are: JPMorgan (NYSE: JPM), Goldman Sachs (NYSE: GM), American Express (NYSE: AXP), Anadarko Petroleum (NYSE: APC), Dean Foods (NYSE: DF), Johnson & Johnson (NYSE: JNJ), Northern Trust (Nasdaq: NTRS) and Lockheed Martin (NYSE: LMT). Janus Capital (NYSE: JNS) was also included in the list by the union as its current chairman, Steve Scheid, once held the position as CEO.
Although the American Federation of State, County and Municipal Employees union has in the past filed for similar proxy proposals, 2012 may be the years its voice is finally heard and recognized. The union has grown to 1.6 million members and oversees a pension plan with $850 million in assets.
In the past, unions and stakeholders have pleaded for an independent chairman at many companies, but have won only in a few circumstances. Reuters believes this year may be different as the group is now targeting more companies than ever. The U.K. already has laws in place which prohibit one person from assuming both roles.
Arguments for the separation of the two roles include the shareholders ability to complain about the CEO’s performance to someone except for the CEO himself and the equal separation of power within the company itself.
Lisa Lindsley, director of capital strategies at the American Federation of State, County and Municipal Employees Union, stated the separation would place some checks and balances on chief executive officers. "The financial crisis shows there hasn't been enough adult supervision of CEOs," she said.
The nine companies are: JPMorgan (NYSE: JPM), Goldman Sachs (NYSE: GM), American Express (NYSE: AXP), Anadarko Petroleum (NYSE: APC), Dean Foods (NYSE: DF), Johnson & Johnson (NYSE: JNJ), Northern Trust (Nasdaq: NTRS) and Lockheed Martin (NYSE: LMT). Janus Capital (NYSE: JNS) was also included in the list by the union as its current chairman, Steve Scheid, once held the position as CEO.
Although the American Federation of State, County and Municipal Employees union has in the past filed for similar proxy proposals, 2012 may be the years its voice is finally heard and recognized. The union has grown to 1.6 million members and oversees a pension plan with $850 million in assets.
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