INVESTMENT & ECONOMIC ANALYSIS: March 2003
SOCIAL TOPICS (Archive): INVESTMENT &
Taking Option Expensing to the Proxy Ballot
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 Resolutions were withdrawn at Archstone Smith Trust,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
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.
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