Companies continue to make progress in improving corporate governance, "but there is still plenty of room for improvement," according to Chicago-based Marco Consulting Group's list of 10 most significant corporate governance developments in 1996.
Most noteworthy, according to the firm, was that more than 50 companies dropped their pension plans for outside directors under pressure from shareholder groups. Second on the list, Florida Progress Corp., a utility company, adopted all six recommendations on director compensation made by the National Association of Corporate Directors.
Other developments in corporate governance last year include Compaq Computer Corp. and Bell Atlantic Corp. dropping their poison pills; the Student Loan Marketing Association restoring the right of shareholders to call for a special meeting; and seven companies - including Ameritech Corp., Applied Bioscience International and Mead Corp.- repealing staggered board elections.
Also of note was a vote recount at Kmart Corp, which showed investors had won their proposal to declassify the company's board. The recount showed shareholders are paying more attention to how their votes are counted, the Marco list notes.
Among bad boys on the list are Tyco Toys, which omitted two shareholder proposals on its shareholder ballot, and Southwest Airlines Co. and Seagate Technology, which gave top executives huge awards of stock options at token exercise prices.