Union Chief Pressures GE on Reforms

April 11, 2003 (PLANSPONSOR.com) - A major union official is using a letter-writing campaign to institutional investors to garner additional support for four 2003 corporate governance-related shareholder proposals for General Electric involving executive compensation and workplace rules.

Edward Fire, president of the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers-Communications Workers of America (IUE-CWA), contended in his letters that the proposals would make GE stronger by linking executive pay to performance, restricting golden parachute deals, and requiring the company to abide by rules that would protect against human and labor rights violations.

The IUE-CWA backed proposals include:

  • its own “Workplace Code of Conduct.”   It directs the GE board of directors to implement rules in every GE site worldwide that would be based on the International Labor Organization’s conventions on workplace human rights.
  • its own “Executive Severance Arrangement.” It asks the board to limit future retirement and severance agreements with senior executives. According to the letter, “In the wake of the expensive departure of former CEO Jack Welch, there are grounds for concern that shareholder investment in GE could be in danger if a senior executive were to leave the Company.”
  • proposal No. 10, sponsored by the Amalgamated Bank LongView Collective Investment Fund. It would tie future stock options grants for executives to performance. Fire noted that “executive compensation has not been consistent with company performance.”
  • proposal No. 12 from the School Sisters of Notre Dame. It would direct the board to report on salary discrepancies between top GE executives and the lowest paid workers worldwide. Fire observed the absence of any evidence “to suggest the appropriateness of such pay extravagance for either the health of the company or the interests of the shareholders.”