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CVS » Topics » Statement of William Steiner

This excerpt taken from the CVS DEF 14A filed Mar 24, 2009.

Statement of William Steiner

Special meetings allow shareowners to vote on important matters, such as electing new directors, that can arise between annual meetings. If shareowners cannot call special meetings, management may become insulated and investor returns may suffer. Shareowners should have the ability to call a special meeting when a matter is sufficiently important to merit prompt consideration.

Fidelity and Vanguard supported a shareholder right to call a special meeting. Governance ratings services, including The Corporate Library and Governance Metrics International, took special meeting rights into consideration when assigning company ratings.

This proposal topic also won impressive support (based on 2008 yes and no votes) at the following companies:

 

Occidental Petroleum (OXY)   66%   Emil Rossi
FirstEnergy Corp. (FE)   67%   Chris Rossi
Marathon Oil (MRO)   69%   Nick Rossi

The merits of this Special Shareowner Meetings proposal should also be considered in the context of the need for further improvements in our company’s corporate governance and in individual director performance. In 2008 the following governance and performance issues were identified:

  n The Corporate Library (TCL) www.thecorporatelibrary.com, an independent investment research firm, rated our company:
       “Very High Concern” in executive pay – $26 million for Thomas Ryan ($392,000 for defined contribution plans).
       “D” in Corporate Governance.
       “High Governance Risk Assessment”
  n Three directors were designated as “Problem Directors” by The Corporate Library due to their involvement with FleetBoston, which approved a major round of executive rewards even as the company was under investigation by regulators for multiple instances of improper activity:
Thomas Ryan    Our CEO
Terrence Murray    Our Lead Director and executive pay committee member
Marion Heard    Audit and nomination committee member

 

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  n Plus our directors served on these boards rated “D” by TCL
1) Thomas Ryan    Yum! Brands (YUM)
2) David Dorman    Yum! Brands (YUM)
3) Richard Swift    Ingersoll-Rand (IR)
4) Jean-Pierre Millon    Cypress Bioscience (CYPB)
5) Lance Piccolo    Chemtura Corp. (CEM)
6) Marian Heard    Sovereign Bancorp (SOV)
  n Two directors had non-director links with our company – Independence concern:
       Lance Piccolo
       Kirsten Gibney Williams
  n Two of our directors held 4 or 5 directorships – Over-commitment concern:
       Richard Swift
       Sheli Rosenberg
  n We had no shareholder right to:
       Act by written consent.
       Call a special meeting.
       Cumulative voting.
       An Independent Chairman

The above concerns shows there is need for improvement. Please encourage our board to respond positively to this proposal:

"Statement of William Steiner" elsewhere:

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