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PLEASANTON, Calif. - Safeway Inc. on Thursday expressed disappointment and disagreement with Institutional Shareholder Services (ISS) for recommending a withhold vote on Safeway chairman and c.e.o. Steve Burd at the company's upcoming annual meeting.
ISS suggested a withhold vote in order to send a signal to the company that additional corporate governance changes should occur. It was joined by another advisory firm, Glass, Lewis & Co.
Safeway urged shareholders to vote "FOR" Burd, and issued the following statement:
"Under his leadership, Safeway shares have grown in value from less than $3 to more than $20 on a split-adjusted basis. Mr. Burd has articulated a clear vision for repositioning Safeway as a differentiated and successful player within the supermarket sector.
We believe the enhancements Safeway has made to corporate governance are substantial -- including implementing every measure previously approved by our shareholders, naming a highly regarded, independent outside director as lead director, and changing three board members. These enhancements grew out of a dialogue with our major shareholders. We will continue to discuss these issues with our shareholders and give their views careful consideration.
Safeway's board and management remain equally focused on executing its strategic plan to improve financial performance, and we urge shareholders to support the team that is working to build a better Safeway."
On Monday, the Board elected Paul Hazen, former chairman of Wells Fargo Bank, to serve as lead independent director. The company reiterated that Hazen, who ISS has determined is an independent outside director and an appropriate chairman of the Audit Committee, is the right person for that position. Hazen has assumed all of the duties required by ISS guidelines.
Dissident shareholders have been railing against Burd and Safeway's board since late March. The critics -- led by public pension funds in New York, Illinois and Connecticut -- say Burd has been mismanaging Safeway while a deeply conflicted board watched idly.
Pleasanton, Calif.-based Safeway has depicted the dissident shareholders as isolated voices speaking on behalf of labor unions that vilified Burd during the Southern California grocery strike.