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GM shareholders reject governance proposals

From Reuters| June 06,2007

General Motors Corp. (GM.N: Quote) investors rejected all 10 shareholder proposals at its annual meeting on Tuesday, including one that would give investors more influence in board elections and another that would recoup bonuses when results are revised downward.

A proposal that would have allowed investors with more than 10 percent of GM stock to call special shareholder meetings received the most preliminary votes, about 41 percent.

A proposal to allow investors to multiply the number of shares they own by the number of board candidates and cast that greater number for just one person garnered only about 26 percent of preliminary votes this year.

That proposal received more than 50 percent of votes last year.

The proposal that called for management bonuses to be recouped when the company restates financial results downward received only about 11 percent of preliminary votes.

The preliminary tally represented 82 percent of the eligible votes, GM said.

Chief Executive Rick Wagoner said the automaker, which lost more than $12 billion in the past two years, was making progress in its turnaround, which includes slashing more than 34,000 jobs and closing 12 plants.

He said the priorities for this year included concluding a deal to allow former parts subsidiary Delphi Corp. (DPHIQ.PK: Quote) to emerge from bankruptcy and cutting its own health-care costs.

"We'll continue to drive for cost-effective agreements to resolve the Delphi restructuring and to further reduce our still unsustainable health-care bill, which was a staggering $4.8 billion in 2006," Wagoner told shareholders at the start of the annual meeting.

Speaking to reporters after the meeting, Wagoner said he was optimistic that a settlement with Delphi could happen sooner rather than later. "My sense is it's kind of coming together," he said. "The number of issues is narrowing. It's in everyone's interest to get it done as soon as we can."

GM has been in negotiations with Delphi and the United Auto Workers since late 2005 over a range of issues centered on contractual terms for the unionized work force of the parts supplier as it emerges from bankruptcy. 

A work stoppage at Delphi has been seen as a lingering risk to GM, which estimates its exposure to its largest supplier at $7 billion.

In response to a question, Wagoner said GM had not considered and was not considering going private like smaller rival Chrysler Group, which in May accepted a $7.4 billion takeover offer from Cerberus Capital Management.

However, Wagoner did indicate in response to another question that a partnership between GMAC, GM's former finance arm, and Chrysler's finance unit was a possibility.

"There haven't been any extensive conversations at this point...," he said. "It is a possibility but not a certainty."

Cerberus also owns a 51 percent stake in GMAC, with GM retaining 49 percent.

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