SOCIAL TOPICS (Archive): INVESTMENT & ECONOMIC ANALYSIS 

Published, March 2003

As part of their overall campaign for corporate reform, labor union pension funds have placed a strong focus on stock option expensing. The pension fund of the United Brotherhood of Carpenters has been most active on this issue, approaching more than 80 companies with stock option related proposals in 2003. Companies the union is targeting include Ecolab, Supervalu, U.S. Bancorp, and Wells Fargo. The Carpenters have made some early headway with other companies. Bear Stearns, DPL, Genuine Parts, Lehman Brothers, Provident Financial, and TXU have all agreed to expense future options. Resolutions were withdrawn at Archstone Smith Trust, AvalonBay Communities, CarrAmerica Realty, Cummins, Mercantile Bankshares, and Simon Property Group because these companies had already begun expensing stock options, or had committed to a January 1, 2003, start date.

Other trade unions have approached approximately 45 more companies. These include the International Brotherhood of Teamsters proposal at Weyerhaeuser and the Communications Workers of America (CWA) resolution at Verizon. CWA announced it would be filing similar proposals at multiple communication and media companies. AFL-CIO, a federation of 65 unions, has also been working on executive compensation issues.

In general, it is Walden’s policy to support these proposals.

An increasing generalized pressure on these companies aids the unions’ efforts. The New York Times published an article by renowned investor Warren Buffet, where he called for companies to expense options. The influential proxy advisory firm, Institutional Shareholder Services, has said that it will support shareholder proposals asking for stock option expensing. Perhaps what is most indicative is that at least 75 other companies have committed to expense options without being formally approached by shareholders. –M. Benton