Shareholders' voices in corporate management just got louder --
at least at Fleming Cos. Inc.
The Oklahoma City-based food marketing and distribution company's
top brass were given a bitter pill to swallow Wednesday as
shareholders determined that any hostile takeover plans must be put
to a shareholder vote.
Anti-takeover plans -- or poison pill plans -- are typically left
to the discretion of corporations' directors, but that could be
changing in corporate America, and Fleming may be the vanguard.
"At stake here is the very notion of corporate governance and the
nature of ownership in corporate America," said Michael Kapsa,
spokesperson for the International Brotherhood of Teamsters who
spearheaded the resolution.
But Robert Stauth, chairman and CEO of Fleming found the
Teamsters' victory less significant, saying that a takeover of
Fleming is unlikely anyway. "This may become a non-issue."
The resolution requiring shareholder approval for poison pill
plans passed by 60.5 percent. Some 86 percent of Fleming's total
outstanding shares were represented at the meeting.
"For shareholders' rights, this is a significant advancement,"
said Bart Naylor, also with the Teamsters. "The institutional
shareholders have now joined with the employee shareholders to
Poison pill plans are anti-takeover defenses that corporations use
to make hostile acquisitions prohibitively expensive. For example, a
company, to thwart a takeover, may issue a new series of preferred
shares, which give shareholders the right to compel their redemption
at a premium price after the takeover.
Fleming's dispute with the Teamsters concerning the poison pill
issue escalated in September when the union filed suit in the
District's federal court alleging that Fleming's board didn't have
the exclusive say-so in instigating poison pill plans, pursuant to
SEC rules. The Teamsters sought the court's declaration that Fleming
must put the issue before the shareholders.
The Teamsters hold only about 65 of Fleming's 37 million shares
Prior to their lawsuit filed in September, the Teamsters had
submitted a proposal at last year's meeting asking Fleming's board
voluntarily revoke its poison pill provision. Despite the Teamsters'
small numbers, their proposal won by a 2-1 shareholder vote. But
Fleming's board later voted to renew the provision.
In January, Judge Wayne Alley ruled in the Teamsters' favor and
required Fleming to include a vote on the issue as part of its April
Fleming's board later voted to voluntarily terminate its plan for
the time being.
Stauth said that the result of Wednesday's vote is that Fleming
now has no anti-takeover provision in place, but he added that
Fleming will heed the voice of its stock owners. "The shareholders
have spoken and we have listened."
Naylor of the Teamsters said that Fleming's poison pill resolution
could pave the way for a new era of shareholders' participation in
corporate governance. "We're on the precipice of history. …