But one of the reform groups thinks Conseco's long-suffering shareholders will be receptive at the June 6 meeting. I think you're going to see a lot more fireworks this year' at the shareholders' meeting, said Brandon Rees, a research analyst at the AFL-CIO, which holds 4,500 shares of Conseco stock through a pension fund. Annual election of directors gives shareholders the power to either completely replace their board or replace a majority of directors, if a situation arises which warrants such drastic action,' states the shareholder proposal. Conseco argues against the proposal, saying the current staggered terms for directors ensure continuity necessary for long-term goals and help stave off takeover attempts. Another shareholder proposal would more closely link executive stock options to company performance.
Stock options allow an executive to purchase shares at a future date at today's price.
Company boards grant the potentially lucrative options to motivate executives to improve results and drive up the stock price. When executives exercise those options, they essentially buy the stock, then turn around and sell it at the higher price, pocketing the difference. Conseco opposes the measure, in part because it says options already align the interest of senior executives with shareholders and that adding strings could make it harder to recruit and retain top executives. Meanwhile, a third shareholder proposal comes from The Amalgamated Bank of New York Long View Collective Investment Fund, which consists mostly of union pension assets. It wants long-term targets for stock options to be disclosed as a percentage of outstanding shares.