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This excerpt taken from the AN DEF 14A filed Mar 23, 2009. Proposal 4:
Stockholder Proposal
The proposal set forth below was submitted to the Company by the
International Brotherhood of Electrical Workers’ Pension
Benefit Fund (referred to as the “Fund”), 900 Seventh
Street, NW, Washington, D.C. 2001, a purported owner of
“more than $2,000” in market value of our common
stock. The Fund’s proposal is printed below verbatim, and
we have not endeavored to correct any erroneous statements or
typographical errors contained therein. The Fund has advised the
Company that it intends to present the following resolution at
our Annual Meeting. The Company is not responsible for the
contents of this proposal or the supporting statement. Our Board
has recommended a vote against the proposal for the reasons set
forth following the proposal.
“RESOLVED: The shareholders of AutoNation Incorporated
(“Company”) urge the Board of Directors to amend the
Company’s by laws, effective upon the expiration of current
employment contracts, to require that an independent
director – as defined by the rules of the New York
Stock Exchange (“NYSE”) – be its Chairman of
the Board of Directors. The amended by laws should specify
(a) how to select a new independent chairman if a current
chairman ceases to be independent during the time between annual
meetings of shareholders, and (b) that compliance is
excused if no independent director is available and willing to
serve as chairman.
SUPPORTING
STATEMENT
The wave of corporate scandals at such companies as Enron,
WorldCom and Tyco resulted in renewed emphasis on the importance
of independent directors. For example, both the NYSE and the
NASDAQ have adopted new rules that would require corporations
that wish to be traded on them to have a majority of independent
directors.
Unfortunately, having a majority of independent directors alone
is clearly not enough to prevent the type of scandals that have
afflicted Enron, WorldCom and Tyco. All of these corporations
had a majority of independent directors on their boards when the
scandals occurred.
All of these corporations also had a Chairman of the Board who
was also an insider, usually the Chief Executive Officer
(“CEO”), or a former CEO, or some other officer. We
believe that no matter how many independent directors there are
on a board, that board is less likely to protect shareholder
interests by providing independent oversight of the officers if
the Chairman of that board is also the CEO, former CEO or some
other officer or insider of the company.
We also believe that it is worth noting that many of the
companies that were embroiled in the financial turmoil stemming
from the recent crisis in the subprime mortgage market (Bank of
America, Bear Stearns, Citigroup, Countrywide, Lehman Brothers,
Merrill Lynch, Morgan Stanley, Wachovia and Washington Mutual)
did not have an independent Chairman of the Board of Directors.
We respectfully urge the board of our Company to change its
corporate governance structure by having an independent director
serve as its Chairman.”
This excerpt taken from the AN DEF 14A filed Mar 27, 2008. Proposal 5:
Stockholder Proposal
The proposal set forth below was submitted to the Company by the
International Brotherhood of Electrical Workers Pension Benefit
Fund (referred to as the “Fund”), 900 Seventh Street,
NW, Washington, D.C. 2001, a purported owner of at least
$2,000 in market value of our common stock. The Fund’s
proposal is printed below verbatim, and we have not endeavored
to correct any erroneous statements or typographical errors
contained therein. The Fund has advised the Company that it
intends to present the following resolution at our Annual
Meeting. The Company is not responsible for the contents of this
proposal or the supporting statement. Our Board has recommended
a vote against the proposal for the reasons set forth following
the proposal.
“RESOLVED, that shareholders of “AutoNation Inc.”
(the “Company”) request the board of directors to
adopt a policy that provides shareholders the opportunity at
each annual shareholder meeting to vote on an advisory
resolution, proposed by management, to ratify the compensation
of the named executive officers (“NEOs”) set forth in
the proxy statement’s Summary Compensation Table (the
“SCT”) and the accompanying narrative disclosure of
material factors provided to understand the SCT (but not the
Compensation Discussion and Analysis). The proposal submitted to
shareholders should make clear that the vote is non-binding and
would not affect any compensation paid or awarded to any NEO.
SUPPORTING
STATEMENT
In our view, senior executive compensation at AutoNation Inc.
has not always been structured in ways that best serve
shareholders’ interests. For example, a 2007 Proxy
Governance Inc. (“PGI”) report listed
AutoNation’s performance in the past five years as lagging
peers with respect to total shareholder returns, cash from
operations/equity and return on equity. The same PGI report
showed CEO and other NEO pay at peer companies as
25 percent and 23 percent above median pay
respectively.
We believe that existing U.S. corporate governance
arrangements, including SEC rules and stock exchange listing
standards, do not provide shareholders with sufficient
mechanisms for providing input to boards on senior executive
compensation. The idea of an advisory vote on compensation has
also been endorsed by the Council of Institutional Investors and
a survey by the Chartered Financial Analyst Institute found that
76% of its members favored giving shareholders an advisory vote.
In addition, a bill to provide for annual advisory votes on
compensation passed in the House of Representatives by a 2-to-1
margin.
In contrast to U.S. practices, in the United Kingdom,
public companies allow shareholders to cast an advisory vote on
the “directors’ remuneration report,” which
discloses executive compensation. Such a vote isn’t
binding, but gives shareholders a clear voice.
Currently U.S. stock exchange listing standards require
shareholder approval of equity-based compensation plans; those
plans, however, set general parameters and accord the
compensation committee substantial discretion in making awards
and establishing performance thresholds for a particular year.
Shareholders do not have any mechanism for providing ongoing
feedback on the application of those general standards to
individual pay packages.
Similarly, performance criteria submitted for shareholder
approval to allow a company to deduct compensation in excess of
$1 million are broad and do not constrain compensation
committees in setting performance targets for particular senior
executives. Withholding votes from compensation committee
members who are standing for reelection is a blunt and
insufficient instrument for registering dissatisfaction with the
way in which the committee has administered compensation plans
and policies in the previous year.
Accordingly, we urge the board to allow shareholders to express
their opinion about senior executive compensation by
establishing an annual referendum process. The results of such a
vote could provide our board with useful information about
shareholders views on the company’s senior executive
compensation, as reported each year.
We urge shareholders to vote for this proposal.”
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