The Corporate Library Is the Most Referenced Independent Source in 2006 Governance Resolutions

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Recent analysis of shareholder resolutions (from 2004, 2005, and the 2006 proxies released through April 18) indicates that The Corporate Library ("TCL") has taken the leadership position as the most referenced governance resolution information source. Almost one-third of current 2006 governance proposals reference TCL’s governance and compensation information and/or Board Effectiveness Ratings. This analysis indicates both the increasing importance of independent governance information sources to shareholder proposals and supports TCL’s positioning as the leading source of independent governance and compensation information.

A review of shareholder resolutions over the past three proxy seasons (2004, 2005, and 2006 up to the end of April 18th) shows a sharp increase in The Corporate Library's data being utilized in shareholder proposals to strengthen the cases of well-known shareholder activists. Almost one-third of 2006 governance proposals reference TCL's governance and compensation information information and/or Board Effectiveness Ratings.

This study provides independent validation of TCL’s position as the leading source of independent governance and compensation information and analysis as reflected in key governance resolutions. Well-known shareholder activists are quoting TCL's ratings and research in increasing frequency to support their cases for corporate governance change at many U.S. public companies.

Of the 334 shareholder resolutions published in public company proxies up to April 18, 2006, 91, or 27% of corporate governance proposals, reference TCL’s research and company ratings. This compares to 7% of all governance proposals filed last year and 1% of all governance resolutions filed in 2004 (see attached table).

The main types of proposals that reference TCL this year are:

  •      board declassification,
  •     appointment of independent Board chairperson,
  •     curb over-extended directors,
  •     performance-based executive compensation,
  •     recoup unearned management bonuses,
  •     adopt simple majority vote,
  •     redeem or vote on shareholder rights plan (poison pill), and
  •     director elections by majority vote.

The filers of these proposals are Nick and Emil Rossi, John Chevedden, William Steiner, The United Brotherhood of Carpenters and Joiners of America, the Massachusetts State Carpenters Fund and the American Federation of State, County & Municipal Employees, Association of BellTel Retirees, SEIU Master Trust and Catholic Equity Fund, CHRISTUS Health and Unitarian Universalist Association as co-filers.

All of the above resolution categories, with the exception the executive compensation categories (‘Recoup Unearned Management Bonuses’ and performance-based compensation), typically achieve in excess of 40% support from shareholder bodies. They challenge boards on fundamental governance issues and frequently achieve majority support, notwithstanding management recommendations to vote against proposed changes.

About The Corporate Library (TCL):

The Corporate Library, headquartered in Portland, Maine, is the leading resource for independent corporate governance and compensation information and analysis of public U.S. corporations. Founded in 1999, it continues to be the authority on corporate governance matters, as evidenced by the frequency with which key media, business and government leaders seek its unique insight and objective perspectives. Additional information on The Corporate Library and its suite of online corporate governance data and analysis products can be found on its website at http://www.thecorporatelibrary.com.

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Melanie Whittier
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