A shareholder proposal that would have required the chairman of the board to hail from outside tw telecom failed earlier this month.
The shareholder proposal was not a complete dud at tw telecom’s June 7 annual meeting. There were about 34.1 million votes cast in favor of the proposal and 106 million cast against it, according to a regulatory filing.
A shareholder in Denver, Gerald Armstrong, had proposed that the board requires its "chairman be an Independent Director who has not previously served as one of our Executive Officers."
Larissa L. Herda is the current chairman, CEO and president of Colorado-based tw telecom. She has served as chairman since June 7, 2001 and been the CEO and president for an even longer period of time: since June 1998.
"The current Chairman, is also President and Chief Executive Officer, which leaves her in a position of accounting only to herself as the six member board met only 10 times during 2010," according to the statement in favor of the proposal that failed. "Her total compensation for 2010 was $9,262,996. Fees paid to board members have been among the highest of NASDAQ listed National Market” corporations (higher than the fees paid directors at Comcast at times)."
Separating the roles of chairman and CEO is viewed by proponents of such a division as curbing conflicts of interest.
But tw telecom’s board opposed the shareholder proposal, stating that Herda is most familiar with the company’s business, operations and strategy. In a proxy statement, the board also declared that Herda’s dual positions "does not compromise the independent oversight of our Board, which otherwise is composed entirely of independent directors who meet frequently in executive session."
According to tw telecom’s website, there are five other board members: Gregory J. Attorri, the 51-year-old founder of GJA Advisory Services LLC; Spencer B. Hays, a 65-year-old retired senior vice president and deputy general counsel of Time Warner Inc.; Kevin W. Mooney, a 52-year-old executive with a software and professional services provider Blackbaud; Kirby G. Pickel, a 53-year-old CEO of Dental Holding Corp.; and Roscoe C. Young, a 59-year-old managing director of Laurelwood Partners, a telecom consulting and restructuring company.
Other than Herda, Mooney and Young have been with the board for the longest consecutive time since 2005, though Hays has served two stints as a director including from October 1999 to September 2006.
The company’s shareholder proposal also included about 17.1 million abstentions and 4.6 million so-called broker non-votes.
The activist shareholder, Armstrong, owns 12,500 shares of tw telecom common stock, according to the proxy statement.