Investment advisors and pensions funds want to dump Safeway's Steve Burd
Two leading investment advisors suggest that Safeway should get rid of its CEO Steve Burd. In a recommendation to their clients they say that these should not vote a continuation for Burd at the shareholders' meeting, which is scheduled for 20 May.
Both Institutional Shareholder Services (ISS) and Glass, Lewis & Co. advise institutional shareholders and are considered highly influential. Their recommendation supports the view of leading pension funds, who last week demanded the resignation of Steve Burd. The pensions funds say that poor acquisitions and labour disputes are hurting the company's stock.
Among those calling for Burd's resignation was New York State Comptroller Alan Hevesi, who represents 2.4 million shares of Safeway stock, owned by state and local pension funds. He was joined by state pension funds in California, Connecticut and Illinois.
The California Public Employees' Retirement System (Calpers), which holds 2.7 million shares in Safeway, has demanded that buy-out firm Kohlberg Kravis Roberts & Co. (KKR) cut its ties with Safeway. KKR has been closely connected with Safeway, since it bought the company in 1986, took it through a draconian cost cutting process, and went public with it in 1990. Investors have criticized the strong presence of KKR on the Safeway board, saying that it raises concerns about the board's ability to perform its control functions.
Steve Burd became infamous as the ringleader of the attempt by three supermarket giants Safeway, Kroger and Albertsons to take away affordable health care from shop workers and their families in California. For four months, UFCW members were on strike or locked out, before they finally hindered their employers from taking away their health benefits and pushing them into the growing ranks of America's working poor.
Recently, shareholders of Safeway competitor Kroger reacted strongly when they were informed that the company had paid 116 million dollars to rivals Safeway and Albertsons. This was done on the basis of a highly questionable agreement between the three retailers to share the costs of their fight for cutting workers health benefits.
Posted by UFCW 227 at May 8, 2004 05:28 PM