According to a news release from the investment company, it is working with about 50 companies to eliminate the equity replenishment features in their option plans, but would not identify the firms involved.
TIAA-CREF officials said the practice effectively circumvents the ability of shareholders to approve the amount of shares available for stock options and can “result in significant dilution of shareholder value.”
“TIAA-CREF is committed to helping ensure that shareholders have an appropriate voice in the issues that can impact them and the value of the shares they own,” said TIAA-CREF’s senior vice president and chief counsel for corporate governance Peter Clapman, in the news release “We look forward to achieving a positive resolution that eliminates evergreen provisions and ensures shareholders have a voice on executive compensation.”
The officials said they are also looking at firms with no termination date for options and those reserving a specified percentage of the outstanding shares for award each year.
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