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/Caremarks 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. Headricks 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.