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This excerpt taken from the EBAY DEF 14A filed May 16, 2005. Management Statement in
Opposition to Stockholder Proposal
In March 2005, after the United Brotherhood of Carpenters
Pension Fund had submitted its proposal for inclusion in this
proxy statement, the Fund and representatives of several other
building trades unions formed a working group with
representatives of ten public companies to study the feasibility
of using the majority vote standard for director elections. The
working group members have stated their intent to prepare a
report on the majority-vote standard prior to the 2006 proxy
season. The American Bar Association has also recently announced
the formation of a task force to study whether to recommend a
change from the plurality vote standard to the majority vote
standard in the ABA’s Revised Model Business Corporation
Act, which state lawmakers look to as a reference in drafting
state corporate laws.
While we share the proponent’s goals of fair elections and
strong corporate governance, we do not believe that adopting a
new standard for the election of our directors before the
proponent’s working group and the ABA task force have
issued their findings is in the best interest of eBay or its
stockholders. The proposed change does not require urgent
action. The stockholders of almost all of the largest
corporations in America currently elect their directors by
plurality vote, and the rules governing plurality voting are
well understood. Had the proposed standard been in effect in
past years, it would not have changed the outcome of any of our
director elections — since eBay has been a public
company, each director nominee has received the affirmative vote
of more than 95% of the shares voted through the plurality
process.
eBay remains open to the possibility of amending its director
election procedures to provide for a majority voting standard if
a consensus emerges on the best corporate governance practice in
this area. We look forward to reviewing the reports of the
proponent’s working group and the ABA task force on this
issue, but we do not believe that eBay and its stockholders are
best served by adopting a change prematurely.
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