Wachovia Shareholders OK Union-Generated Exec Pay Petition

April 20, 2006 (PLANSPONSOR.com) - Wachovia Corp. shareholders have narrowly approved a nonbinding resolution by a union-administered mutual fund to require that bank severance packages worth three times more than the executive's salary be shareholder approved.

About 57% of shareholders voting at the bank’s annual meeting this week in¬†Charlotte approved the measure put forward by the Trowel Trades Index Fund, a mutual fund that owns about 54,000 shares of Wachovia stock, the Associated Press reported. The fund is administered by the International Union of Bricklayers and Allied Craftworkers.

”We’re not terribly surprised,” said Jake McIntyre, assistant to the union’s secretary-treasurer, according to the news report. ”Everyone in the institutional community supports reasonable restrictions on severance plans.”

According to the news report, the development at Wachovia is part of a broader effort by labor union pension and investment funds to force limits on executive pay, benefits and severance packages. Unions representing carpenters, government workers, teamsters and electrical workers have also submitted shareholder resolutions to force compensation limits at McDonalds, Bank of America and Duke Energy.

Wachovia CEO Ken Thompson told reporters following the meeting that the nation’s fourth-largest bank holding company is ”comfortable” with the restriction, despite opposing it.

The bank’s concern, he said, is that ”if we were acquiring somebody that had contracts above that, we wouldn’t want that to be the reason that we failed to make a good acquisition,” the news report said.

Thompson earlier told shareholders that Wachovia’s board of directors would take the proposal ”into consideration if future agreements are contemplated.” A spokeswoman declined to further explain how the company would address the resolution.