IBM Pension Protest Falls Short – Again

April 24, 2001 ( - For the second year in a row, an employee-backed shareholder proposal challenging IBM's pension policies has come up short.

The proposal drew just 14.7% of the votes cast at the annual shareholder meeting, according to IBM spokeswoman Carol Makovich. That was just half the support drawn by last year’s vote ? at the time a surprisingly strong 28%.

The shareholder proposal wanted the computer giant to give all employees, regardless of age, the same retirement medical insurance and pension choices as employees who are within five years of retirement,

Age Gate

Those supporting the proposal alleged that IBM’s new retirement and medical benefits plan discriminates based on age, because employees under 40 years of age were blocked from participating in the old plan.

The proposal also would have required that IBM?s portable cash-balance provide a monthly annuity equal to that which employees were entitled to under the original pension plan, or an actuarially equivalent lump sum.

IBM claimed that its old compensation and benefits package was out of line with competitors.

Last week two proxy advisory research firms, Institutional Shareholder Services and Proxy Monitor, advised shareholders to vote against the proposal, of last year’s shareholder vote.