News

17/04/2009

UK Shareowner’s Proxy Proposal at US Company gets 42.5% support

Governance for Owners (GO) announces that the shareholder proposal by its client Railpen Investments at Texas Instruments (TXN) attracted 42.5% support at its annual shareholders' meeting on April 16, 2009. The proposal asked TXN to appoint an independent Chairman. Although Railpen has co-signed other shareholder proposals, this is the first time that Railpen has submitted a shareholder proposal on its own to a US company.

Frank Curtiss, Head of Corporate Governance at Railpen Investments commented, "We see this as a significant expression of shareholder concern about the lack of effective independent board leadership. We believe strongly in the concept of an independent Chair to lead the board. Failing that, a Lead Independent Director with clear authority can provide shareowners with assurance that the board has appropriate input on board meeting agendas and conduct, as well as on company strategy. We hope that the board will take heed and engage with shareholders on this important matter."

Peter Clapman, CEO of GO USA, added "This is an excellent result, especially given that the company does not have obvious performance problems that would prompt actions against the board. Clearly, shareholders have confidence in the directors who were re-elected with an average support of 93%. However, the support for Railpen’s resolution is an indication of the importance to shareholders of establishing independent board leadership."

GO advised Railpen on the development and submission of the proposal. GO's USA subsidiary provides advice and services on corporate governance issues in the United States. It is expected that engagement will also be initiated at other companies in which Railpen is a share owner that have not identified a single director with defined duties as the Independent Lead Director.