Roger L. Headrick, CVS/Caremark Corp. director, was asked to resign by CtW Investment Group because of a 43% vote against his election. “When The Walt Disney Co.’s shareholders withheld an unprecedented 45% of their votes from Chairman and CEO Michael Eisner in 2004, the board stripped Mr. Eisner of his chairmanship within hours,” William B. Patterson, CtW executive director, wrote in a letter to David W. Dorman, chair of CVS/Caremark’s nominating and corporate governance committee. CtW is a corporate governance consultant to union and public pension funds.
“We fear ‘phantom votes’ — those cast by brokers exercising discretion under NYSE Rule 452 to vote certain client shares — may have provided Mr. Headrick’s margin of victory,” the letter said. The “results are even more extraordinary given that CVS/Caremark has a majority vote policy for the election of directors. Votes cast against Mr. Headrick therefore cannot be dismissed as mere symbolic expressions of shareholder concern.”
CVS/Caremark, in a SEC filing Wednesday, disclosed the results of the voting at its May 9 annual meeting. Mr. Headrick got 606,585,338 votes in favor and 453,175,142 against, according to the filing.
Carolyn Castel, director-corporate communications at CVS/Caremark, said Mr. Headrick was elected with a clear majority and will continue as a director.
