OFFICE DEPOT SHAREHOLDERS MOVE TO SPLIT LEADERSHIP ROLES

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OFFICE DEPOT SHAREHOLDERS MOVE TO SPLIT LEADERSHIP ROLES

 user 2009-04-28 at 12:19:49 pm Views: 43
  • #21941

    http://www.sun-sentinel.com/business/sfl-office-depot-stockholders-meeting-042209,0,3337910.story
    Office Depot shareholders move to split leadership roles
    Office Depot shareholders want separate chairman and chief executive
    It’s a conflict for the same person operating the company to oversee the board of directors, said Rich Ferlauto, director of corporate governance for the American Federation of State, County and Municipal Employees, to a handful of shareholders at the annual meeting at the Boca Raton Marriott.Office Depot’s shareholders on Wednesday passed an investor proposal to separate the roles of company chairman and chief executive officer, a move many large corporations have made in recent years.The nonbinding measure passed with 54 percent of shareholders in favor. Now it will be reviewed by independent directors, Steve Odland, the chairman and chief executive who survived a separate stockholders’ challenge in 2008, said at the annual shareholders’ meeting.The Boca Raton-based office supply retailer had recommended that shareholders vote against the proposal, saying lead independent director Neil Austrian fills the role an independent chairman would.

    It’s a conflict for the same person operating the company to oversee the board of directors, said Rich Ferlauto, director of corporate governance for the American Federation of State, County and Municipal Employees, to a handful of shareholders at the annual meeting at the Boca Raton Marriott.Odland told shareholders he is positioning Office Depot for recovery and international growth.”We will focus on what we can control,” Odland said, adding that the retailer has closed 112 of nearly 1,300 North American stores and six distribution centers. More warehouses will be closed in coming months and years as the company consolidates distribution, he said.

    Meanwhile, Office Depot is trying to expand its international business. It’s already the largest office supply retailer in China and India.Office Depot has been a bellwether company for the recession, he said, because its prime customer is the small business, which has cut back on purchases. The spillover effects from the housing crunch in Florida and California, states that make up 30 percent of Office Depot’s retail sales, also have driven down store sales, Odland said.The company’s stock, which hit a 52-week low of 59 cents in March, has bumped up in recent weeks, closing Wednesday on the New York Stock Exchange at $2.12, up 13 cents.

    For 2008, Office Depot posted a loss of $1.48 billion, or $5.42 per share, compared with a profit of $396 million, or $1.43 per share a year earlier. The annual loss was on sales of $14.5 billion, down 7 percent from 2007. First-quarter earnings are scheduled to be released Tuesday.Odland said larger rival Staples has been less affected by the weak economy because it has larger operations in Canada and the Northeast.Aside from its economic challenges, Office Depot has faced investigations related to overcharging for office supplies by the U.S. Justice Department, Florida public agencies and several states. Office Depot said it is cooperating with all the investigations.

    In an interview Wednesday after the annual meeting, Odland said most of the pricing disputes were politically motivated and Office Depot has saved public agencies millions of dollars on office supplies compared with smaller supply firms.According to the company’s proxy statement, Odland’s 2008 total compensation was $9.36 million. Of that, $1 million is his annual salary. Odland said he did not get a performance bonus for two years and stock options that are part of last year’s compensation last year are currently worthless.

    Separately, the New Mexico Educational Retirement Fund on Monday filed an amended lawsuit in U.S. District Court for the Southern District of Florida accusing Office Depot of financial fraud.The lawsuit uses the company’s restated earnings in part of 2006 and early 2007 to allege that Office Depot misreported vendor rebates to artificially inflate earnings during that period.Brian Levine, an Office Depot spokesman, said the suit is a refiling of one dismissed by the court.