The AFL-CIO has called on Peabody Energy to reform the company's director elections and to pay close attention to proposals surrounding the company's operations in China.
Earlier this year, over seventy percent of Peabody Energy's shareholders voted in favor of an AFL-CIO sponsored proposal to elect directors annually, but Peabody Energy has not implemented or responded in any way to the seventy percent of Peabody Energy shareholders who voted for the AFL-CIO's resolution.
In addition, a United Mine Workers of America shareholder proposal urges Peabody Energy to adopt an employee policy based on the International Labor Organization's human rights conventions. Peabody Energy plans to establish joint ventures to operate coal mines in China, where safety violations are commonplace in the mining industry.
"It is outrageous that any company would ignore a vote of its shareholders," said AFL-CIO Secretary-Treasurer Richard Trumka. "The retirement savings of America's working families are invested in companies like Peabody Energy. Director elections are the primary avenue for shareholders to hold management accountable and influence crucial corporate governance policies," he explained.
Peabody Energy's current director election framework divides the board into three classes, with approximately one-third of all directors elected each year to three-year terms. In July, Peabody Energy nominated John F. Turner to the Board of Directors. Under Peabody Energy's classified board system, shareholders will not have the opportunity to vote on Turner's nomination until his term expires in 2007.
In addition, shareholders have not been able to vote on the Board seat held by Peabody Energy's next CEO. In March 2005, Peabody Energy executive Gregory Boyce was added to the Board and he is scheduled to become the company's CEO in January 2006. Shareholders will not be able to vote on Boyce as a director until the 2006 annual shareholders meeting, 15 months after he took on his responsibilities on the Board.
The AFL-CIO has resubmitted its shareholder proposal to declassify Peabody Energy's Board of Directors. Peabody Energy shareholders will vote on the AFL-CIO's resolution for a second time at the 2006 annual shareholders meeting. Several other proposals to reform Peabody Energy's corporate governance have also been introduced for 2006.
