The International Brotherhood of Teamsters has set its sights on trucking giant Swift Transportation and Chief Executive Officer Jerry Moyes.
According to a news release, the Teamsters are asking shareholders of publicly traded stock to approve a proposal that would address the company’s dual stock structure – an arrangement that provides Moyes with majority voting control of the company “despite owning a minority of outstanding shares.”
The Teamsters, in conjunction with the proxy advisory firm ISS, also are asking shareholders not to vote for incumbent members of the Swift board’s audit committee.
“The board’s inability to rein in the excessive pledging of stock by CEO Moyes or the hundreds of millions of dollars in related-party transactions with Moyes-controlled businesses reveals significant deficiencies on our board and raises serious questions about the true independence and effectiveness of our directors,” Teamsters General Secretary-Treasurer Ken Hall wrote in a letter to Swift Chairman William Post in November. “We believe that at the core of the problem at Swift is its dual class stock structure, which gives disproportionate voting power and control to a single holder of a minority of the outstanding shares.”
The release said Moyes and other parties agreed to a new loan arrangement last fall that extends his voting control for three additional years. Swift’s transactions with Moyes’ controlled businesses, like the company’s acquisition of Central Refrigerated Transportation for $225 million in August 2013, also concerns the Teamsters.
“Until there can be meaningful board oversight of management and true accountability at Swift Transportation, Jerry Moyes will continue to use the corporate coffers as his own personal piggy bank,” Hall said.
The U.S. Department of Justice and the SEC investigated Moyes for suspected insider trading at Swift in 2004. The next year, Moyes paid $1.5 million in disgorgement, prejudgment interest and penalties to settle the SEC investigation. He also resigned from his leadership role at Swift. In 2007 he took Swift private before taking the company public again in 2010.
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