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Reebok Shareholders Fret Over Directors

May 02, 1997|From Bloomberg News

STOUGHTON, Mass. — Reebok International Ltd.'s shareholders approved a proposal at its annual meeting that asks the company to have all its directors elected at the same time.

The nonbinding proposal was submitted in February by the California Public Employees' Retirement System, or Calpers, which holds about 599,900 Reebok shares. Almost 53% of Reebok's shareholders approved the proposal, Calpers said.

The proposal makes it possible for all Reebok board members' terms to end at the same time so that shareholders have the option to vote all of them out at once.

"This is the same board that managed the company through its decline," Calpers spokesman Brad Pacheco said. "That's a significant factor for us because of its poor performance and shareholder returns."

Calpers named Reebok one of its 10 bottom financial performers in February, shortly before the No. 2 U.S. maker of athletic clothes and shoes said first-quarter earnings fell 17% on higher costs and lower revenue from the strength of the U.S. dollar against other currencies.

Shares in Stoughton, Mass.-based Reebok rose 12.5 cents to $38.50 in trading of 231,400. The company has seen its stock rise 34% in the past year, more than the Standard & Poor's 500 Index, which has risen 22%.

Calpers is also concerned about how accountable Reebok's individual board members are for the company's performance, specifically two directors who sit on at least three other boards, Pacheco said.

Those board members are Jill Elikann Barad, who is also a director at Bank of America NT & SA, BankAmerica Corp. and Microsoft Corp., and Mannie Jackson, who is also a director at Ashland Inc., Stanley Works and Jostens Inc.

In addition, Paul Fireman, Reebok's chairman and chief executive, is the only board member with substantial stock ownership.

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