Louis Armstrong invades SEC filings…

March 17, 2010

As we flipped through the preliminary proxy that supermarket chain Safeway (SWY) filed the other day, we found ourselves humming “Let’s Call the Whole Thing Off” — that song by the Gershwin Brothers that was famously sung by Louis Armstrong and Ella Fitzgerald:

You say either and I say either, You say neither and I say neither
Either, either Neither, neither, Let’s call the whole thing off.

You like potato and I like potahto, You like tomato and I like tomahto.

Potato, potahto, Tomato, tomahto, Let’s call the whole thing off

The reason? In a section of the proxy that begins on pg. 30, the company talks about the “modest death benefits” that the company provides to senior vice presidents or higher. The section goes on to note that these benefits were modified in December 2008 to make them less prevalent and that they are no longer available for any employee hired after Dec. 15, 2008.

But deeper into the proxy, there’s a shareholder proposal from the AFSCME Employees Pension Plan that doesn’t see the death benefits as being quite so modest. Instead, they describe them as “golden coffins”, which seems more than a pronunciation preference to us. Here’s a snip:

In our view, golden coffin payments—making payouts to senior executive’s beneficiaries based on salary and bonus that have not been earned by the executive prior to death and/or making post-death payments in lieu of perquisites—are not consistent with these principles. According to the 2009 proxy statement, Safeway provides a special death benefit to all named executive officers that results in a payment of four times salary, up to $4 million maximum, if the executive dies in office or after retirement.

This is the second year that AFSCME has submitted this proposal. But last year, Safeway didn’t use the word modest to describe the perk. In any event, shareholders defeated the proposal with 132 million votes cast in favor and 214 million in opposition.

What would Louis and Ella have to say about all of this?

But oh, if we call the whole thing off Then we must part
And oh, if we ever part, then that might break my heart

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