US - The American Federation of State, County and Municipal Employees (AFSCME) Pension Plan has tabled a proposal for the Morgan Stanley's (MS) annual meeting, demanding that directors should receive a majority vote from shareholders.
The news follows hot on the heels of media speculation which puts the bank’s former president, John Mack in poll position to replace Purcell as chairman and CEO.
“The current board is a creature of Purcell's reign,” said Gerald McEntee (pictured), AFSCME Pension Plan chairman. In addition to needing a new CEO who can rebuild shareholder confidence, the company needs a board that no longer carries the baggage of a failed leader.
“As long-term institutional shareholders, we recommend that Purcell- affiliated directors resign from the board before the next annual meeting so that new directors can stand for election,” said McEntee. It is our hope that the nominating committee will reach out to shareholders to build a new board capable of making independent strategic decisions about the future of the company.
According to the AFSCME Plan, six of the 12 members of the board have ties to Purcell through Sears, Dean Witter, AMR or McKinsey Consulting. Two of those directors were elevated to the board as part of Purcell's power consolidation in response to the dissident group.
The situation at Morgan Stanley is another example of why shareholders need the ability to remove and replace failed directors, said McEntee.
This year more than a dozen shareholder proposals on majority votes have been supported by shareholders.
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