UPDATE 1-Goldman seeks to block vote on independent chairman

Wed Jan 23, 2013 6:12pm EST

By Rick Rothacker

Jan 23 (Reuters) - Goldman Sachs Group Inc wants to block a shareholder vote on a proposal to require an independent chairman, trying to halt the latest effort to split the CEO and chairman positions, currently held by Lloyd Blankfein.

Last year, the New York investment bank headed off a similar proposal from another group by appointing a lead independent director on the board.

Beverly O'Toole, Goldman Sachs associate general counsel, sent a letter to the U.S. Securities and Exchange Commission on Jan. 16 seeking permission to exclude the shareholder proposal from the annual proxy, calling it "inherently vague and indefinite."

CtW Investment Group, which works with union pension funds with more than $200 billion in assets, submitted the resolution in December. The group's proposal called for a board policy requiring the chairman to be a director who has not previously been the CEO and who is independent of management.

Shareholders will vote on proposals included in the proxy filing at the company's annual stockholder meeting.

Michael Pryce-Jones, senior research analyst with CtW, said the group was disappointed with Goldman's effort to block the proposal for what he called "nit-picky" reasons. The company needs an independent chairman because that position would set the board's agenda and provide additional oversight, he said.

Last March, the American Federation of State, County and Municipal Employees dropped its proposal to split the posts after Goldman agreed to create the lead independent director position, which is held by former insurance executive James Schiro.

Naming a lead director "was a move in the right direction, but it's clearly not enough," Pryce-Jones said. Goldman Sachs and the SEC declined to comment.

In recent years, a number of banks have faced shareholder proposals to split the chairman and CEO positions, in hopes of creating more checks and balances on top management.

The resolutions have produced mixed results. In 2009, former Bank of America Corp CEO Ken Lewis lost his chairmanship after shareholders approved such a proposal. Wells Fargo & Co shareholders last year voted down such a resolution.

This year, investment bank Morgan Stanley plans to omit a proposal to split the chairman and CEO jobs because the shareholder did not show that he met the minimum share ownership requirement, according to a letter sent to the SEC. The SEC did not object, according to a Jan. 15 response.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.