Alaska Airlines and Horizon Air 2014 Annual Report Download - page 27

Proposal 4: Stockholder Proposal Regarding Independent Board Chairman
Mr. John Chevedden has given notice of his
intention to present a proposal at the 2015
Annual Meeting. Mr. Chevedden’s address is
2215 Nelson Avenue, No. 205, Redondo Beach,
California 90278, and Mr. Chevedden represents
that he has continuously owned no less than
100 shares of the Company’s common stock
since July 1, 2013. Mr. Chevedden’s proposal
and supporting statement, as submitted to the
Company, appear below.
The Board of Directors opposes adoption of
Mr. Chevedden’s proposal and asks
stockholders to review the Board’s response,
which follows Mr. Chevedden’s proposal and
supporting statement below.
The affirmative vote of the holders of a majority of
the shares of common stock present, in person or
represented by proxy at the meeting and entitled to
vote is required to approve this proposal.
ALK: Rule 14a-8 Proposal, November 2, 2014
Proposal 4 - Independent Board Chairman
Resolved: Shareholders request that the
Board of Directors adopt a policy that the
Chair of the Board of Directors shall be an
independent director who is not a current or
former employee of the company, and
whose only nontrivial professional, familial
or financial connection to the company or its
CEO is the directorship. The policy should be
implemented so as not to violate existing
agreements and should allow for departure
under extraordinary circumstances such as
the unexpected resignation of the chair.
When our CEO is our board chairman, this
arrangement can hinder our board’s ability
to monitor our CEO’s performance. Many
companies already have an independent
Chairman. An independent Chairman is the
prevailing practice in the United Kingdom
and many international markets. This
proposal topic won 50%-plus support at 5
major U.S. companies in 2013 including
73%-support at Netflix.
This topic is of additional importance for
Alaska Air because our company seems to
have a default type of quasi-lead director.
Plus there are questions on the
independence of 5 of our directors who each
have 10 to 32-years of long-tenure: Patricia
Bedient, Jessie Knight, Phyllis Campbell,
Kenneth Thompson and Byron Mallott. GMI
Ratings, an independent investment
research firm, said long-tenured directors
can form relationships that may compromise
director independence and therefore hinder
director ability to provide effective oversight
of our CEO/Chairman. These 5 directors
ontrolled [sic] 87% of the votes on our 3
most important board committees.
Other concerns with director oversight
include the assignment of Kenneth
Thompson to our executive pay committee
as chairman when he is potentially
overextended with seats on 4 public boards.
And Alaska Air did $2.7 million of business
with Helvi Sandvik’s company.
Additional issues (as reported in 2014) are
an added incentive to vote for this proposal:
GMI was concerned with excessive CEO perks
and pension benefits. Unvested equity awards
partially or fully accelerate upon CEO
termination. Meanwhile shareholders had a
potential 14% stock dilution. GMI rated Alaska
Air D in accounting. Alaska Air reported a
$120 million charge related to how it reports
its revenue from its Bank of America credit
card agreement (October 2013).
Returning to the core topic of this proposal
from the context of our clearly improvable
corporate governance, please vote to protect
shareholder value:
Independent Board Chairman - Proposal 4
ŠProxy
PROPOSALS TO BE VOTED ON 15