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Lexmark Folds Vs. ShareHolders To Declassify Board
At its recent annual meeting of stockholders, Lexmark International announced it will increase its quarterly dividend to 30 cents per share, a 5-cent increase.The increased dividend will be paid on June 15 to shareholders of record on June 1.
Lexmark launched the dividend in October 2011, ending off-and-on criticism over the years by analysts who suggested that the company should issue dividends rather than spend its money repurchasing shares of stock.
The annual meeting also saw shareholders approve an advisory proposal asking the company to declassify its board, a move that would require all members of Lexmark’s board of directors to be voted on by stockholders annually.
In a filing with the Securities and Exchange Commission, Lexmark stated that 53.2 million shares were cast in favor of the proposal versus just 4.1 million against. Before the meeting, the company’s board had urged stockholders to vote against the proposal.
After the meeting, Lexmark’s board "determined that it would be in the best interests of the company and stockholders to declassify the board," spokesman Jerry Grasso said.
To make the change, the board will ask stockholders to approve an amendment to the company’s certificate of incorporation at the 2013 annual meeting, he said.
The proposal was brought by the state treasurer representing the North Carolina Retirement System, which holds more than 166,000 shares of Lexmark stock. In submitting the proposal, the state treasurer said that "having directors stand for elections annually makes directors more accountable to shareholders and could thereby contribute to improving performance and increasing firm value."
The Lexmark proposal was one of 25 submitted to companies by the North Carolina officials who are working with the Harvard Law School Shareholder Rights Project, an initiative that pairs students with public pension funds to improve corporate governance.
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