Pay NO attention to this…

February 17, 2004

Though SBC Communications’ (SBC) preliminary proxy statement was just filed on Friday, it’s already been buried by all the hoopla surrounding the $41 billion Cingular/AT&T Wireless deal. Coincidence? Probably not, since the last time SBC filed a preliminary proxy was back in 1998, when it was clinching a deal to buy SNET. SBC owns 60% of Cingular. SBC’s partner, Bell South (BLS) owns the other 40%. In the proxy, the company says it plans to begin requiring board members to stand for annual elections next year and that it also plans to start reducing the board’s size from the current 21. As one shareholder points out in the proxy in their proposal to reduce the board a lot more quickly than SBC seems to prefer, SBC’s board is about 50 percent larger than those at other large telecoms. At $60,000 a pop for an annual retainer, plus $13,000 in SBC stock and additional fees, it’s easy to see how having a large board can quickly get expensive. Finally, the proxy also noted that Chairman and CEO, Edward Whitacre Jr. received nearly $19.4 million in total compensation in 2003, up from the $11.42 he received in 2002. While most of that was due to a large restricted stock award, SBC shareholders only saw their stock increase 1.8% in 2003, well below SBC’s competitors and the S&P 500. Still wondering why the proxy was buried?

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