Morgan Stanley directors will meet next month with representatives of the $700 million AFSCME Employees Pension Plan, Washington, in response to a formal request from the system last week, said Richard C. Ferlauto, AFSCME director-pension and benefit investment policy.
Mr. Ferlauto said the discussion will deal with several of the open seats on the Morgan Stanley board of directors. "We are primarily focused on the composition of the new board, which will have at least four to five new members," said Mr. Ferlauto. "We want input into the process for nominations, but we also want direct input into the selection of the new directors."
The exit packages for former Morgan Stanley Chairman and CEO Philip Purcell and Stephen Crawford, a former co-president, were the "third strike" that prompted the pension plan to seek a meeting with the firm. In a letter to Morgan Stanley last week, Gerald W. McEntee, chairman of the AFSCME plan, wrote: "The recent positions of the board, including its reluctance to replace CEO Philip Purcell, its initial limitations on the search for his replacement, and the structure of the exit packages for top executives, create questions about the ability of the board to faithfully serve the interest of shareholders."
Pension plans in which AFSCME members nationwide participate own roughly 4% of Morgan Stanley stock, according to the letter, including 13,465 owned by the AFSCME plan.
Jim Badenhausen, Morgan Stanley spokesman, could not immediately be reached for comment.