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Cendant board to shareholders: drop dead!

Buried in the Q that Cendant (CD) filed yesterday is a small item — a paragraph really — that basically says that Cendant’s board members could care less that investors think they should have an opportunity to reign in Cendant’s future severance deals with senior executives.

A little history: At Cendant’s annual meeting in late April, shareholders approved the proposal, submitted by a mutual fund run by the Trowel Trades union, by a nearly 2:1 vote. Though there weren’t many details in the proxy, the union was no doubt concerned about some of the lavish benefits — including lifetime arrangements — that had been doled out to senior executives in prior years.

So how did the board respond to the overwhelming vote? Here’s a snippet from the Q filed yesterday: “Our board considered the advisory severance proposal…which received majority approval…and determined that our existing severance agreement policy was in the best interest of all stockholders. If it (the board) changed our policy…we could be put at a competitive disadvantage.”

What’s that mean in non-corporate speak? Drop dead!