NYSE Director Salgado Loses Majority Vote On Attendance Concerns
04/26/2012| 01:32pm US/Eastern
("UPDATE: Director Salgado Loses Majority Vote On Attendance Concerns," at 12:44 EDT, misstated Ricardo Salgado's name in the ninth paragraph. The correct version follows:)
--NYSE Euronext director Salgado fails to garner majority of shareholder votes
--Salgado attended fewer than 75% of the exchange's board meetings in 2011
--NYSE says Salgado missed meetings to help guide Portuguese bank during debt crisis
By Chris Dieterich and Jenny Strasburg
NEW YORK (Dow Jones) -- NYSE Euronext Inc. (>> NYSE Euronext) said a longtime director will offer to quit the exchange company's board after nonbinding, preliminary results showed he failed to get a majority of support in a shareholder vote.
The majority of investor votes that were announced at the Big Board's annual shareholders meeting Thursday declined to back the reelection of Ricardo Salgado, vice chairman of Banco Espirito Santo S/A (>> B.ESPIRITO SANTO), Portugal's largest bank by market capitalization. Salgado attended fewer than 75% of the exchange's board meetings in 2011, NYSE board chairman Jan-Michiel Hessels told shareholders before the preliminary voting results were announced Thursday morning.
Thursday's vote marked the first time a director has failed to get a majority vote from NYSE shareholders, a company spokesman said.
Last year, the company wrestled with its proposed merger agreement with Deutsche Boerse AG (DB1.XE, DBOEF). The deal, announced in February 2011, was rejected by European regulators earlier this year. The planned $18.1 billion tie-up would have created the world's largest combined market for trading stocks and derivatives.
It wasn't clear when the board will decide whether to accept Salgado's expected resignation request. An NYSE spokesman said after the meeting it will be considered in "a timely fashion."
The exchange has previously vouched for Salgado's involvement in key discussions such as those about the proposed Deutsche Boerse deal. NSYE defended Salgado's attendance record in a proxy statement filed with the Securities and Exchange Commission last month, noting he missed meetings as he attempted to navigate Banco Espirito Santo through the European sovereign-debt crisis.
"Mr. Salgado's intensive efforts to address the crisis restricted his ability to attend certain of the significant number of special meetings held in connection with the proposed business combination with Deutsche Boerse, which were not part of the regular meeting schedule and were often called with little advance notice," NYSE said in the March 26 proxy filing.
An NYSE spokesmen declined to let reporters speak to Salgado, who attended Thursday's meeting.
Proxy-advisory services Glass Lewis & Co. and Institutional Shareholder Services Inc. both recommended against Salgado's re-election, according to documents from the companies.
The NYSE Euronext vote comes less than two weeks after Citigroup Inc.'s (C) shareholders rejected the compensation plan the bank's board had approved for its senior executives. The rebuke marked the first time a major bank had suffered a "no" vote on executive pay.
James Rothenberg, a representative of holders of 50,000 shares, said after the NYSE shareholder meeting that the vote against Salgado was "unfortunate."
"He can't be in two places at one time," Rothenberg said.
-By Chris Dieterich, Dow Jones Newswires; 212-416-2611; email@example.com