March 25, 2004 11:39 AM PST
PeopleSoft shareholders support CEO
During an unexpectedly subdued PeopleSoft annual shareholders meeting in Pleasanton, Calif., investors cast roughly 95 percent of their votes in favor of re-electing CEO Craig Conway and three other board members. The vote serves as a stamp of approval for the board, which at one time faced the possibility of running against an opposition slate of directors put together by Oracle. However, after the U.S. Department of Justice said it would oppose Oracle's bid, that company withdrew the slate.
"We are gratified that PeopleSoft stockholders gave such overwhelming support for the board of directors at our annual meeting," David Duffield, the chairman and company founder, said in a statement. "The vote clearly indicates that our stockholders recognize the efforts the board has made to protect and enhance stockholder value."
Despite the vote of approval, some investors expressed interest in the Oracle acquisition.
"Assuming the antitrust concerns will be addressed and resolved, will PeopleSoft's board of directors do the right thing and allow itself to be acquired by Oracle?" asked Matthew Vandall, who represented institutional investor Chesapeake Partners.
George "Skip" Battle, PeopleSoft's board director, said the company was rejecting the deal because it expected the Justice Department to oppose it. He declined, however, to speculate on what PeopleSoft would do, were its competitor to win the antitrust court case.
Conway addressed PeopleSoft's use of a controversial customer assurance program, which some investors and shareholder advisory groups have described as a de facto "poison pill," or anti-takeover measure.
"We needed to maintain the confidence of our customers, to ensure the revenue stream and the continued success of the company, and to maintain shareholder value," he said. "And we did that."
PeopleSoft has drawn fire from some investors and a shareholder advisory group over its customer assurance program. Glass Lewis & Co., which advises pension fund and portfolio managers, recommended that its clients withhold votes for two directors and Conway. The recommendation had some effect, as those three received fewer votes than the fourth director, whom Glass Lewis did not single out.
In addressing the state of PeopleSoft and its outlook, Conway reassured investors that "as the economy continues to improve, we think the company's strength will become more apparent."
PeopleSoft investors also took a stand on another controversial issue, voting narrowly to support the expensing of stock options. They joined a growing list of shareholder groups that are demanding that companies include the perk in their financial number crunching. The shareholder proposal PeopleSoft's board recommended against passed by 53 percent of the votes cast.
"PeopleSoft's board of directors will give this stockholder vote careful consideration, as part of their evaluation of accounting treatment of option grants," the company stated.