AFL-CIO and Utility Workers Urge Shareholders of FirstEnergy to Vote to Reform Executive Pay
WASHINGTON, May 2, 2013 /PRNewswire-USNewswire/ -- The AFL-CIO and the Utility Workers Union of America are urging shareholders of FirstEnergy (NYSE: FE) to vote "against" the company's advisory vote on compensation for its named executive officers — also known as the "Say-on-Pay" vote.
The AFL-CIO and UWUA also recommend that FirstEnergy's shareholders "withhold" their votes from all five director nominees who are members of the Board of Directors' Compensation Committee — Robert B. Heisler, Jr., Ted J. Kleisner, Christopher J. Pappas, Catherine A. Rein, and Wes M. Taylor — and vote "for" three shareholder proposals recommending reforms in the company's executive pay practices.
The AFL-CIO and the UWUA are encouraging shareholders to vote against FirstEnergy's Say-on-Pay resolution because CEO Anthony Alexander's total compensation went up 27 percent in 2012 to $23.3 million, despite the company's poor performance last year. The company's revenues, net income and earnings per share all fell in 2012.
The two organizations urge shareholders to withhold their votes from the entire Compensation Committee because of the directors' failure to respond to shareholder concerns about executive compensation. Despite the company's poor performance, the Compensation Committee also voted to give Mr. Alexander a $9.3 million restricted stock retention package.
The three shareholder proposals seeking to reform the company's executive pay practices include a proposal submitted by UWUA which urges the Board of Directors to end the practice of benchmarking the CEO's total compensation to that of peer companies. According to the proposal, this practice has contributed to a year-after-year ratcheting up of CEO pay at FirstEnergy without regard to corporate performance.
A shareholder proposal submitted by the AFL-CIO recommends that retirement benefits for senior executives that offer preferential benefit formulas compared to other employees should be submitted to shareholders for approval. Another proposal encourages the retention of a significant portion of equity awards by senior executives until they reach retirement age or leave the company.
"In our view, FirstEnergy is a prime example of the problem of runaway executive pay at U.S. companies," stated Michael Langford, National President of the UWUA and a member of the AFL-CIO Executive Council. "Shareholders have an opportunity this year to send a strong message to directors that compensation practices for top executives at this company must be reformed."
The complete communication from the AFL-CIO and UWUA to FirstEnergy shareholders is available at http://www.aflcio.org/proxyvotes.
The AFL-CIO is a federation of 57 labor unions including the UWUA. The UWUA and other AFL-CIO affiliated unions represent employees of FirstEnergy, and members of AFL-CIO affiliated unions also participate in pension funds that are shareholders of FirstEnergy.
The AFL-CIO and UWUA are not seeking to act as a proxy for any shareholder, and will accept no proxy cards. Any proxy cards received will be returned.
For more information contact:
Brandon Rees, AFL-CIO, 202.637.5152
Mark Brooks, UWUA, 615.259.1186
SOURCE Utility Workers Union of America