On golden coffins…

Last week, investors at Johnson Controls (JCI) defeated a proposal by Amalgamated Bank to ban so-called golden coffin arrangements — deals that as the WSJ reported last June pay “huge corporate payouts to their heirs if they die in office.” The proposal is a new one that so far (and the season is still early) has found its way onto three proxies this year.

In addition to Johnson Controls, Amalgamated also brought a similar shareholder resolution at The Shaw Group (SGR), which will vote on the proposal this Wednesday and AFSCME, the large labor union, has introduced its own version at Disney (DIS), which filed its proxy a week ago Friday. Disney shareholders will vote on the proposal at its annual meeting on March 10.

What’s interesting is that while all three shareholder proposals use the words “golden coffins” none of the responses from the respective boards use that language. At Disney, for example, the program is called “the Family Income Assurance Plan” which sounds significantly better than “golden coffins”. In the proxy, Disney notes that it started the program 30 years ago and that at least for the past few years “the Plan has not been extended to any new senior executive”.

Since it’s still relatively early in the year, we expect to see more golden coffin proposals. But just like the three we’ve seen so far, we’re pretty sure each of the companies will describe them as something a lot more gentle-sounding than a golden coffin.

UPDATE 1/28: According to Amalgamated press release, the proposal at Shaw passed by 2/3. Of course, given the current rules, majority voting means nothing. At least it doesn’t require the board to do anything. Still, it’s an interesting outcome.

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