This excerpt taken from the SWY DEF 14A filed Apr 12, 2005.
STOCKHOLDER PROPOSAL REGARDING DIRECTOR COMPENSATION
The Company has been notified by Victor Rossi, P.O. Box 249, Boonville, California 95415, who owns 235 shares of Common Stock, that he intends to present the following proposal for consideration at the Annual Meeting:
The shareholders of Safeway request the board of directors take the necessary steps to amend the companys governing instruments to adopt the following: Beginning in the 2006 fiscal year at least 50% of the compensation of each board member shall be restricted common stock of Safeway. This restricted stock shall be held until that board member retires from our board of directors.
Victor Rossi holder of 235 common shares of Safeway, Certificate # SWY 84289 12/31/01. Victor Rossi has held these shares continuously for the required amount of time and intends to own these shares through the date of the 2005 annual meeting.
There is no better way to align managements compensation with the shareholders interest than to have to own the common stock.
The Board of Directors recommends a vote AGAINST this proposal for the following reasons:
Safeway believes that aligning Board compensation with Company performance can enhance results of operations and, as a result, stockholder value. The Company has applied this philosophy to its Board compensation methodology. On June 2, 2004, Safeway adopted a new compensation policy for its Board of Directors whereby it requires that fifty percent (50%) of each directors aggregate annual cash compensation (all cash remuneration payable to a director for services as a director, including service on committees) be deferred into a stock account pursuant to the terms of the Deferred Compensation Plan for Safeway Non-Employee Directors. We note that the Deferred Compensation Plan also gives Safeways non-employee directors the option of electing to defer all or part of the remaining 50% of their compensation into stock credits, which most of the directors have elected to do.
Safeways non-employee directors receive an annual fee for serving as directors, in addition to fees for service as chair or a member of a Board committee, which is payable on a quarterly basis. Safeways officers do not receive additional compensation for their service as directors. Each calendar quarter a non-employee directors stock account is credited with a number of shares of Common Stock of Safeway that could have been purchased during the quarter with the directors compensation deferred during the quarter. That portion of a directors stock account that represents mandatorily deferred compensation is restricted and is not payable to the director until he or she leaves the Board. As such, Safeway believes its director compensation policy is substantially similar to and has the same effect as what is called for by the proposal. In order to preserve Company resources, we offered the proponent the opportunity to voluntarily withdraw his proposal, which he refused to do.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL, and your Proxy will be so voted unless you specify otherwise.