Ingersoll-Rand Shareholders Vote To Keep Bermuda Address

May 29, 2003 ( - Shareholders of Ingersoll-Rand Co. narrowly voted down a highly touted proposal from unions and institutional investors to reincorporate from its current Hamilton, Bermuda address.

However, this year’s vote holds an ominous warning for those that are not yet ready to trade in their Bermuda shorts. Only 58.6% of the votes were cast dissenting to the prospect of moving back to a United States address, compared to the nearly 90% that voted in favor of the so-called corporate inversion in 2001, according to a Dow Jones report.

The American Federation of State, County and Municipal Employees (AFSCME), who along with the “Come Home to American” coalition sponsored the proposal, saw the results as a positive step.   Richard Ferlauto, director of pension investment policy at AFSCME said the vote “gives strong momentum to shareholders who are concerned about the impact on shareholder rights — from reincorporations to tax havens. It should send a clear message to all companies, not only Ingersoll-Rand — but to Tyco and McDermott — that this is of the highest level of concern to shareholders.”

The coalition, along with numerous other activists, has be en campaigning hard this year for large conglomerates to return to the United State to provide greater accountability.  The main argument these groups have used is that offshore incorporations weaken shareholder protections, with most of these companies maintaining little more than a skeleton crew in their offshore address, instead operating from executive offices stateside.

A similar proposal garnered only 26% of Tyco International Ltd.’s shareholder votes and a shareholder resolution submitted to oil-field-services concern McDermott International Inc. by AFSCME and the California Public Employees’ Retirement System (CalPERS) was dropped a s the company entered into a partnership with the two groups to assist in bringing about a resolution to the issue.  Under the partnership agreement, McDermott will continue its review of restructuring alternatives related to the possible re-domestication, and AFSCME and CalPERS will have access to the analysis and provide feedback (See  McDermott Reviews Expatriate Status ).

In addition to the reincorporation vote, all four of Ingersoll-Rand’s nominees to the board were approved.