Union Pacific Chairman and CEO Jim Young received $15.3 million in total compensation last year, a drop of $1 million compared with the year before in part because of a lower bonus, the company said Wednesday.
Young received a $2.5 million bonus compared with $3 million in 2008. He received a $1.1 million salary and $7.5 million in stock awards and stock options, the same as in 2008. The value of his pension and other compensation was lower in 2009.
Because of the challenging economy, Young recommended no base salary increases for Union Pacific’s top 150 executives in 2009 and 2010.
Union Pacific released the salary figures in its proxy statement to federal regulators, which also detailed two proposals that shareholders will vote on during their May 6 annual meeting in Salt Lake City.
One proposal from Pax World Management Corp. of Portsmouth, N.H., which owns 22,500 shares of Union Pacific stock, calls for separating the positions of CEO and chairman. Pax World argues that an independent chairman is in a better position to evaluate, hire and oversee executive management, including the CEO, and to take a long-term view of the company’s needs.
Union Pacific’s board said it recommends that shareholders vote against the proposal. The board said it wants flexibility to act in shareholders’ best interests and Pax World’s proposal would limit its options. Combining the chairman and CEO positions provides unified leadership, as well as one person who can speak for the company and the board when addressing investors, employees and others, the board said.
Union Pacific also has 11 outside, non-employee directors on its 12-member board, including a lead independent director who approves the flow of information, agendas and schedules for the board and serves other key roles, the board said.
A second proposal came from stockholder John Chevedden of Redondo Beach, Calif., calling for a simple majority rule for all shareholder votes, including two-thirds super-majority provisions in Union Pacific’s charter and bylaws.
Under the two-thirds provisions, a 1 percent minority can frustrate a 66 percent majority, Chevedden said.
The board recommended that shareholders vote against the proposal. A simple majority rule already applies to almost all matters submitted to a shareholder vote, the board said. One exception is for removal of directors outside the majority voting that takes place at annual meetings, which is essential to protect shareholders from abusive takeover tactics, given shareholders’ ability to call special meetings, the board said.
The other exception is amending revised articles of incorporation to adversely affect preferences, rights or powers of the company’s preferred stock. Currently there is no preferred stock outstanding, the board said.
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