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    Burd Still Safeway Chairman

    PLEASANTON, Calif. - Safeway c.e.o. Steven Burd has retained his position as chairman, beating back a months-long pension fund proxy challenge at the supermarket chain's annual shareholders meeting yesterday.

    PLEASANTON, Calif. - Safeway c.e.o. Steven Burd has retained his position as chairman, beating back a months-long pension fund proxy challenge at the supermarket chain's annual shareholders meeting yesterday.

    Several state pension funds, among them the California Public Employees' Retirement System (CalPERS), had worked to prevent Burd's re-election. Fund officials have expressed dissatisfaction with Safeway's low profits, expensive labor wrangles, and ties between its board and management.

    Burd, however, was re-elected as chairman with 83 percent of shareholder votes, according to preliminary totals announced during an often tumultuous meeting at company headquarters. Two other directors whom critics had decried as insufficiently independent, Robert MacDonnell and William Tauscher, also won re-election by wide margins. A separate shareholder proposal to separate the roles of c.e.o. and chairman was beaten, earning only 33.2 percent approval.

    Some shareholders made use of a question-and-answer period to chastize Burd and his fellow directors for Safeway's worsening relationship with its unions, and the lack of distance between executives and board members. Several current and former store workers made emotional pleas for executives to find ways to increase profit other than by reducing hourly wages and benefits.

    After the four-month supermarket strike in Southern California, the United Food and Commercial Workers, which represents Safeway employees, strongly supported the campaign to replace Burd as chairman. Safeway has claimed that its pension fund critics have close links to labor, among them Sean Harrigan, CalPERS board President, who is also a senior UFCW official.

    Burd admitted that the strike was costly in monetary and human terms, but said that even after the subsequent salary and benefit reductions, Safeway store workers are still better paid than most of their industry peers.

    Burd said that Safeway plans to keep cutting labor costs during contract negotiations in Northern California, the Sacramento area, and other locations.

    While the meeting went on, a few hundred union workers and their supporters held a demonstration outside calling for the c.e.o.'s ouster.

    In response to criticism about its board of directors, Safeway announced earlier in the month that it would replace three of its nine directors. Two of the departing directors are connected with Kohlberg Kravis Roberts & Co., the investment firm that privatized Safeway in 1986. Some shareholders contended yesterday that the changes were not enough, but Safeway maintains the move will make it a leader in corporate governance.

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