At EMC's annual shareholder meeting last week, shareholders approved a shareholder-submitted proposal that requests that the company increase the number of members on its board of directors who don't have direct ties to the company. The proposal, submitted by shareholder activist group Walden Asset Management of Boston, represents the first time EMC shareholders voted on resolutions that weren't sponsored by the company's management. The shareholder action is a sign of increased shareholder activism during a time when many companies aren't as strong financially as in past years.
EMC's board currently consists of seven members, and according to shareholders supporting the resolution, only three of those members are not connected to the company in some way. EMC's board includes Joseph Tucci, EMC CEO; Michael Ruettgers, EMC chairman and former CEO; John R. Egan, son of the company's co-founder Richard Egan; W. Paul Fitzgerald, a former EMC CFO; Michael Cronin, Windle Priem, and Alfred Zeien.
The resolution is nonbinding, but shareholders are hopeful that EMC will honor the shareholders' request. Ruettgers said the resolution was consistent with his own views, but part of the resolution would bar executives from companies that have done business with EMC from serving on the board. According to Ruettgers, enforcing this part of the resolution would eliminate most of the qualified candidates.
The shareholders voted down another shareholder resolution that called for an increase in board diversity. Currently, all seven members of EMC's board are white males.