Sybase has responded to the California Public Employees? Retirement System?s (Calpers) criticisms in a filing with the Securities and Exchange Commission, stating that it had already raised the management accountability issues under debate at its February board meeting.
Last week, Calpers sent a memo to its members, asking them to vote in favour of Item 5 of the database supplier?s annual proxy statement, dated 15 April 1998. This recommends that Sybase amend its bylaws to make it mandatory for its board members to be elected annually. Stockholders can currently review corporate decision making practices annually and generally vote out about one-third of the board every three years.
Calpers also wanted to see board members increasing their own personal vested interest in the organisation, claiming this would encourage them to boost performance more.
But, Sybase maintained that declassification of its board is not in the best interest of shareholders and recommended shareholders to vote against the proposal.
"Corporate accountability depends on responsible and experienced individuals diligently fulfilling their obligations to the stockholders", not in the amount of time served, according to the filing.
A spokeswoman said: "Calpers and Sybase are after the same objective - to increase stockholder and shareholder value. We are looking at the long term perspective. With the staggered approach of electing board members on three year terms, we believe this gives us the opportunity to have people with Sybase that are committed to the future of the company. A turnaround takes a long time, and the stability of the board is very important in that sense."
She added that the company?s lead independent director and legal counsel were working on a plan to encourage board members to own more stock. While all of them currently own shares in the firm, three did not buy them with their own money, but the spokeswoman said "we are working on them to encourage them to buy stock".
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