WASHINGTON, April 24, 2015 /PRNewswire/ -- Leading proxy advisory firm Institutional Shareholder Services (ISS) issued a report today recommending that shareholders of Aqua America, Inc. (NYSE: WTR) vote "for" a shareholder proposal concerning extraordinary retirement benefits for Aqua's senior executives.
The shareholder proposal, which was submitted by the Utility Workers Union of America for inclusion in Aqua's proxy statement for the company's May 8, 2015, annual meeting, urges Aqua's board of directors to seek shareholder approval of any future extraordinary retirement benefits for top executives. The UWUA's proposal appears as Proposal No. 5 in Aqua's proxy statement.
Aqua maintains two supplemental retirement plans providing extraordinary pension benefits for senior executives that are not generally available to all employees, including a Supplemental Executive Retirement Plan ("SERP") available only to CEO Nicholas DeBenedictis. According to the company's proxy statement, the present value of DeBenedictis' total retirement benefits at the end of 2014 was more than $7.5 million, including $4.7 million in benefits in the two supplemental plans.
ISS notes in its report that "these benefits are not linked to company or executive performance and, while once seen as a competitive recruitment tool, increasingly stand out as a substantial non-performance-based pay element for executives who receive them." The ISS report concludes that "in light of the significant potential costs and increasing shareholder focus on pay for performance, this proposal seeking shareholder approval of SERP benefits warrants support."
The UWUA has distributed a shareholder communication urging that Aqua investors vote "for" the UWUA proposal on the company's proxy. The UWUA shareholder communication emphasizes that Aqua's extraordinary executive retirement benefits are not tied to corporate or executive performance, noting that "shareholders will be required to fund Aqua's preferential retirement benefits long after executives' departures, regardless of performance."
The UWUA's shareholder proposal is available as Proposal No. 5 in Aqua's 2015 proxy statement.
The Utility Workers Union of America represents employees in the utility and related industries, including hourly employees of Aqua America. UWUA is not seeking to act as a proxy for any shareholder, and will accept no proxy cards. Any proxy cards received will be returned. The UWUA is not affiliated with ISS and has not consulted with ISS concerning this communication.
SOURCE Utility Workers Union of America