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ISS Backs Employee Shareholder Resolution to Restore Pension, Retiree Medical Benefits at IBM
Institutional Shareholder Services is recommending support for a shareholder resolution on the agenda of the April 25 IBM Corp. (NYSE:IBM) meeting - submitted by IBM employees - that will restore pension and retirement medical coverage for workers whose benefits were slashed by IBM last year.
The ISS endorsement is just the latest in a series of announcements of support for the measure by major investors, including today's announcement by the New York State Common Retirement fund, as well as other public employee and joint pension funds and private investor groups.
ISS, with 500 clients, is a private advisory service whose actions are closely followed by non-clients and major investor groups. Analysts believe this recommendation could affect as much as 30 percent of the voting stock.
The Communications Workers of America has been working to build support for the resolution among major investors and is supporting employees at IBM who are seeking a voice in their workplace by joining Alliance@IBM, a professional organization affiliated with CWA.
Resolution No. 5 calls on the board of directors to give all employees, regardless of age, the same retirement medical insurance and pension choice as employees who are within five years of retirement, basically restoring to employees the pension and retiree health care benefits IBM had committed to provide.
CWA President Morton Bahr said the ISS endorsement means the mainstream financial community recognizes that IBM erred last year when it changed the rules on employees, with the company, as a result, losing a big competitive advantage in retaining skilled, experienced employees.
"IBM relies on its employees to create and implement new ideas in products, to sell large systems, to work with customers and to expand its business. But its action last year which slashed retirement health and pension security broke trust with employees. This measure restores to employees the benefits they were promised and deserve," he said.
In supporting the resolution, the ISS proxy analysis said "the unveiling of the new plan has resulted in negative public sentiment and poor employee morale, which in our opinion, could have a material adverse effect on the company." The analysis also noted that employees had no input regarding what provisions they would like to have under a new plan.
Alliance@IBM members are organizing to gain a voice at work and to prevent future unilateral changes in benefits and working conditions.
Earlier today, the New York State Common Retirement Fund announced it would vote its 5.7 million shares in support of the resolution. In a letter to New York State Comptroller Carl McCall, CWA Vice President Larry Mancino noted that IBM's action last year cost employees, on average, more than $100,000 in reduced retirement pay and huge cuts in their medical retirement coverage. Despite IBM's limited reversal of that action, some 80,000 employees are denied pension choice and the benefits IBM had promised them, he wrote.
Other institutional investors and advisers calling for support of the resolution include Calpers, the California state employee retirement system; the founder and former chairman of the Vanguard Funds; the Oregon state fund and a number of jointly managed Taft-Hartley funds.
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The ISS endorsement is just the latest in a series of announcements of support for the measure by major investors, including today's announcement by the New York State Common Retirement fund, as well as other public employee and joint pension funds and private investor groups.
ISS, with 500 clients, is a private advisory service whose actions are closely followed by non-clients and major investor groups. Analysts believe this recommendation could affect as much as 30 percent of the voting stock.
The Communications Workers of America has been working to build support for the resolution among major investors and is supporting employees at IBM who are seeking a voice in their workplace by joining Alliance@IBM, a professional organization affiliated with CWA.
Resolution No. 5 calls on the board of directors to give all employees, regardless of age, the same retirement medical insurance and pension choice as employees who are within five years of retirement, basically restoring to employees the pension and retiree health care benefits IBM had committed to provide.
CWA President Morton Bahr said the ISS endorsement means the mainstream financial community recognizes that IBM erred last year when it changed the rules on employees, with the company, as a result, losing a big competitive advantage in retaining skilled, experienced employees.
"IBM relies on its employees to create and implement new ideas in products, to sell large systems, to work with customers and to expand its business. But its action last year which slashed retirement health and pension security broke trust with employees. This measure restores to employees the benefits they were promised and deserve," he said.
In supporting the resolution, the ISS proxy analysis said "the unveiling of the new plan has resulted in negative public sentiment and poor employee morale, which in our opinion, could have a material adverse effect on the company." The analysis also noted that employees had no input regarding what provisions they would like to have under a new plan.
Alliance@IBM members are organizing to gain a voice at work and to prevent future unilateral changes in benefits and working conditions.
Earlier today, the New York State Common Retirement Fund announced it would vote its 5.7 million shares in support of the resolution. In a letter to New York State Comptroller Carl McCall, CWA Vice President Larry Mancino noted that IBM's action last year cost employees, on average, more than $100,000 in reduced retirement pay and huge cuts in their medical retirement coverage. Despite IBM's limited reversal of that action, some 80,000 employees are denied pension choice and the benefits IBM had promised them, he wrote.
Other institutional investors and advisers calling for support of the resolution include Calpers, the California state employee retirement system; the founder and former chairman of the Vanguard Funds; the Oregon state fund and a number of jointly managed Taft-Hartley funds.
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