231 Pinetuck Lane Winston-Salem, NC 27104 Phone: 336-765-9765
Mr. Stephen Cutler, Director
Division of Enforcement
U.S. Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0609
Dear Mr. Cutler:
This letter is written on behalf of the members of the Lucent Retirees Organization (LRO). It is to present a question we all have as to the democratic voting process in corporate America. Along with the posing of our question we will provide what we believe to be a relevant commentary. Your review and consideration are sincerely requested.
By way of background, please know that, almost from inception, the LRO has assisted Lucent shareholders by supporting to the best of its abilities certain proxy resolutions. The intent of those proxies was to protect the investments of Lucent shareholders from potential special interest decisions by its Corporate Management and Corporate Board that may be in conflict with shareholders best interests.
The subject resolutions were focused on fairness in:
· Executive Compensation,
· Election of Directors, and
· Management of Pension Funds.
Several of our members proxies received approval by a majority of the shareholder votes that were cast. However, many shareholders did not cast their votes, and on the premise that a majority vote of the total owned shares was not attained, it was not deemed mandatory by Lucents Corporate Management and Corporate Board that they be implemented and they were not. Our view is that such a lack of implementation is totally contrary to the electoral procedures that constitute the American way.
Recently, the controversy over the voting rules in Iraqs constitutional referendum put this anomaly on the world stage as one Iraqi group tried to manipulate results by including votes not cast as a determining factor. That approach was condemned by most of the world -- notably the United Nations and the United States. It was called a violation of international election standards. As a result the Iraqis reversed themselves and made actual votes cast the determining factor.
Even more relevant, we elect the President of the United States on a majority of electoral votes cast and consider the majority of all votes cast by citizens as critical to the process, never counting those who didnt vote but had the opportunity to do so. In addition, our state and local leaders are elected based on the very same premise of considering the majority of all actual votes cast by citizens, never counting those who dont vote.
With all of the foregoing in mind, our question is a simple one: When and how will our federal administration, its agencies, and/or the Congress also condemn and change similar, undemocratic, corporate practices that are taking place in the United States?
Ensuring that the majority of cast votes are the controlling factor would make corporate outcomes meaningful. In that way, the votes cast by those who care enough to vote in shareholder elections would carry weight, and the changes that Corporate Boards tend to avoid would, in fact, become realities.
This is what America is all about: Basic fairness in the democratic process.
We look forward to your response.
Ken Raschke, President