SALT LATE CITY, April 26 (Reuters) - AT&T Inc prevailed against heavy shareholder support for a proposal to separate the Chairman and Chief Executive role at the telephone company on Friday, adding to a rising tide of demands for governance change in corporate America.
Almost 44 percent of votes cast on Friday were in support of a shareholder proposal to require that only independent directors serve as Chairman at AT&T’s annual meeting in Salt Lake City, Utah.
The proposal was rejected by 56.2 percent of votes at AT&T’s first shareholder meeting since Chairman and Chief Executive Randall Stephenson’s failed attempt last year to buy smaller rival T-Mobile USA for $39 billion.
Stephenson has held both Chairman and CEO roles since he took over the top job in 2007 from Ed Whitacre, who also held both roles. The attempt to buy T-Mobile USA was seen as Stephenson’s boldest move since he took the helm.
At the sidelines of the meeting, AT&T’s President Ralph de la Vega told Reuters that the rejection of the proposal “was the right way to go.” “It makes for a more efficient company when one person runs it,” he said.
Shareholder support for separating the chairman and CEO role has been rising among U.S. investors each year, according to data gathered by corporate governance firm Institutional Shareholder Services from company filings and investors.
Also on Friday, 46 percent of shareholders at Honeywell International Inc voted in favor of a resolution that would also have split the chairman and CEO roles.
These votes compared with an average of 34.6 percent support for similar proposals among shareholders at 30 companies last year, ISS said.
A majority of shareholders approved such proposals at four of the 30 companies ISS looked at last year. In 2010, the average support for such proposals was at 28 percent, according to ISS.
ISS cited six other instances at U.S annual meetings so far this year where shareholder support for such resolutions was higher than the 2011 average.
Last month, Walt Disney Co CEO Bob Iger took on the chairman role despite objections from ISS. The Disney board announced its plan to consolidate the roles in October.
The move recalled for some Disney shareholders the turbulence surrounding former CEO Michael Eisner, who was stripped of his chairman role in 2004.
Some shareholders of Rupert Murdoch’s scandal-plagued News Corp have also been calling to separate the role of Chairman and CEO, both held by Murdoch.