GM Board Amends Bylaws
GM Board Amends Bylaws and Corporate Governance Policies
Changes Include Majority Voting in Director Elections
DETROIT, Oct. 5 -- General Motors Corp. (NYSE: GM) today announced
that its Board of Directors voted to amend the company's Bylaws and corporate
governance policies to address stockholder views raised at this year's Annual
Meeting. The changes include adoption of the majority voting standard for the
election of directors and a stronger policy to recover unearned incentive
compensation from executive officers in cases of fraud, misconduct or
negligence.
The amendments are effective immediately.
"Earlier this year, our stockholders expressed a desire for change surrounding
the election of directors and a more defined policy of accountability for
senior officers," GM Chairman and Chief Executive Officer Rick Wagoner said.
"We listened to their views, and after careful consideration, the Board voted
to make changes to certain Bylaws and corporate governance policies that are in
line with stockholders' input."
The Board agreed to adopt a majority voting standard in uncontested elections
of directors, when the number of nominees does not exceed the number of
directors to be elected. Majority voting requires that nominees to the Board
receive more than 50 percent of the votes cast to be elected. Abstentions will
not be included towards counting a majority. Directors were previously elected
by plurality in uncontested elections.
In accordance with the majority voting Bylaw, the Board will require director
nominees to submit irrevocable resignations as a condition to being nominated.
The Board could accept these resignations if a director does not receive a
majority of the votes cast. Under a related governance policy, the Board will
accept the resignation of an unsuccessful incumbent absent a compelling reason
to reject the resignation, in accordance with criteria set out in the policy.
The Bylaws were also amended to fix the number of directors at the current
level of twelve, subject to future change by the Board.
The majority voting standard received 59 percent of the affirmative vote at
GM's Annual Meeting in June. Shortly after the meeting, the Delaware
Legislature amended the state's corporation law to better facilitate majority
voting.
The Board chose not to adopt cumulative voting, which was the subject of a
stockholder proposal that was supported by 54 percent of votes cast. The Board
believes that a director has the fiduciary duty to represent all stockholders
and is concerned that cumulative voting could lead to the election of
constituency directors who feel a duty to the electorate forming their
constituency. Also, in a company with majority voting, the addition of
cumulative voting would raise the possibility of accumulating "withhold" or
"against" votes. This could create the potential for small groups of
stockholders to overcome the interests of the majority.
The Board also adopted a corporate policy under which the company may require
reimbursement of bonus or incentive compensation that may have been paid to
executive officers in the event it is later determined that fraud, misconduct
or negligence significantly contributed to a restatement of financial results
that led to the awarding of unearned incentive compensation. A stockholder
proposal on this issue was supported by 42 percent of the shares voted at the
Annual Meeting. Although this proposal did not receive majority support, the
Board voted to respond to the stockholders' desire to see a policy that
reflects the robust manner in which GM has and would deal with such
circumstances.
In addition to these governance actions, the Board has amended the Bylaws to
specify the procedures applicable to consent solicitations initiated by
stockholders, which complements the existing procedures for stockholder
initiatives at meetings. These changes also provide a framework for the conduct
of solicitations in accordance with Delaware law.
The amended Bylaws and corporate governance policies will be filed today with
the U.S. Securities and Exchange Commission.
General Motors Corp., the world's largest automaker, has been the global
industry sales leader for 75 years. Founded in 1908, GM today employs about
327,000 people around the world. With global headquarters in Detroit, GM
manufactures its cars and trucks in 33 countries. In 2005, 9.17 million GM cars
and trucks were sold globally under the following brands: Buick, Cadillac,
Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and
Vauxhall. More information on GM can be found at http://www.gm.com .
SOURCE General Motors Corporation
-0- 10/04/2006 P
/NOTE TO EDITORS: For additional media information visit http://media.gm.com ./
/CONTACT: Gina Proia, +1-212-418-6389, +1-914-714-9166 mobile, or Renee
Rashid-Merem, +1-313-665-3128, +1-586-899-0971 mobile, both of General Motors
Corporation/
/Web site: http://media.gm.com
http://www.gm.com /
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