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 12:20:26 pm Views: 73
  • #22216
    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.