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16 April, 2003Joint USWA/AFL-CIO effort to pass resolution on executive pay practices at the U.S.-based aluminium transnational wins majority at annual meeting.
USA: A remarkable victory has been chalked up by the IMF-affiliated United Steelworkers of America. The shareholder resolution on executive severance agreements, presented to the annual meeting of the aluminium giant Alcoa on April 11 by the USWA and sponsored by the AFL-CIO, passed with 65 per cent of the vote. This achievement was all the more significant as shareholders decided to follow organised labour rather than the company, which had recommended to vote against the proposal.
The resolution states that Alcoa's Board of Directors should seek shareholder approval for executive severance agreements triggered by a change in control -- often known as "golden parachutes" -- that total more than three times the executive's current salary and bonus. The resolution warned shareholders that golden parachutes are excessive and can reward underperformance leading up to a merger.
Among reasons for targeting this major multinational are that the USWA represents 12,000 Alcoa employees, many of whose retirement plans include Alcoa shares, as well as the company's outrageous executive compensation practices. Last year, Alcoa share prices dropped nearly 35 per cent.
The USWA's president, Leo Gerard, said the company's executive compensation practices "were especially inappropriate given Alcoa's recent efforts to cut costs on the backs of our members. Passage of this resolution sends a clear message to Alcoa's Board of Directors that this sort of corporate cronyism will not be tolerated."