Boeing union takes its beef to investors

Published 9:00 pm Thursday, April 25, 2002

By Bryan Corliss

Herald Writer

Boeing Co. shareholders next week will vote on three proposals backed by the International Association of Machinists.

It’s a new step for the union, which is hoping that going through Wall Street will get corporate leaders focused on the needs and issues of workers, Machinists union spokeswoman Connie Kelliher said. "That’s who they pay attention to these days."

Most workers are not happy with the direction the board has taken Boeing, said Machinists union president Mark Blondin.

Putting these measures before shareholders "is an opportunity for them to send their message to this board," he said. "It’s something we should have been doing a good time back."

Two of the measures seek to link the pay of top executives to workers’ rights, pay and training. The third would limit severance packages for departing executives to no more than double their annual salary.

"I’m not going to begrudge them what they make," Blondin said. But if Boeing executives can afford big salaries, bonuses and retirement packages for themselves, than they can do more for workers, too, he said.

Boeing’s directors are opposed to each proposal and have recommended no votes, saying they either are unnecessary or impractical.

The three union-backed proposals are among 10 shareholder initiatives to be voted on at the annual meeting, which will be Monday in Chicago. It’s Boeing’s first annual meeting since moving its headquarters from Seattle last year.

Boeing workers themselves are among the company’s shareholders, many through their participation in the company’s 401(k) retirement plan. Union leaders are urging members to contact the plan’s administrator, State Street Bank and Trust Co. of Boston, to direct that their shares be voted in favor of the proposal, and have established a Web link at the Machinists union home page to help with that. State Street is the largest Boeing stockholder, with control of more than 10 percent of all Boeing shares.

The union-backed proposals are listed as Nos. 4, 5 and 10 on the proxy statement issued to shareholders last month in advance of the meeting.

Proposal 4 calls on the directors to undertake a review of executive pay to find ways to link it to "social corporate performance." This would include efforts to promote basic human rights for its workers and to compare pay for company officers with that of the lowest-paid Boeing workers in the United States and overseas.

The results of the review would be reported by September 2003 under the proposal.

The directors, in their statement against the proposal, note that they have an executive compensation committee that already looks at social responsibility issues in determining what top executives are paid.

Proposal 5 calls for linking executive pay to employee loyalty and satisfaction.

Studies show that companies with high levels of employee training, participation and feedback tend toward higher performance and, ultimately, greater shareholder value, the proposal said.

Boeing’s response is that the board already considers many of these issues when setting each executive’s pay each year.

Proposal 10 would place limits on golden parachutes given to departing executives following mergers, requiring shareholder approval for any package worth more than 200 percent of a senior executive’s annual base pay.

That’s not practical, Boeing’s board replied. The company would either have to hold an expensive special election or wait for an annual meeting for a shareholder vote. Furthermore, severance pay is a legitimate component of executive pay and something that should remain within the control of the board of directors, the board’s written response to the proposal says.

Union-backed proposals up for a vote at the Boeing Co.’s annual shareholders’ meeting Monday would: