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Rite Aid: Proposal would not affect current executives
Michael Sadowski//June 26, 2015//
Listen to this articleRite Aid officials said late Thursday the non-binding proposal, if enacted as presented, would apply only to future executives at the company, not current, contracted executives who stand to receive awards should there be a change in control at the company.
The last line of the resolution contains the wording, “shall be implemented so as not to affect any contractual rights in existence on the date this policy is adopted.”
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That would apply to Standley, who under current policy stands to receive about $42.2 million in immediate financial benefits — the so-called “golden parachute” clause in the executives’ contracts — if the company were sold, according to the company’s 2015 proxy report.
The proposal, though approved by 58 percent of the company’s shareholders at Thursday’s annual shareholder meeting, is non-binding and subject to approval by Rite Aid’s board of directors. According to a company statement, “Rite Aid’s Board of Directors will take the shareholder vote regarding this matter under advisement.”
The Rite Aid board, in the company’s 2015 proxy report, recommended shareholders vote against the recommendation.
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The change in policy was proposed by CtW Investment Group, a very small Rite Aid shareholder that works with the pension funds of unions associated with the Change to Win labor federation. Not enacting the measure could be dangerous to Rite Aid’s board members, according to CtW Investment Group’s director of corporate governance, Michael Pryce-Jones.
“A board that fails to enact on a shareholder vote that gains majority support is simply deferring the day of reckoning with large investors voting against directors that fail to implement majority-backed shareholder proposals,” he said in an email.
Rite Aid Corp. trades its shares on the New York Stock Exchange under the ticker symbol RAD.
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