Tuesday, April 30, 2013

Teamsters demand action at Swift

The Teamsters warned investors today that Swift Transportation’s board of directors has allowed its CEO Jerry Moyes to pledge nearly 25 percent of all outstanding shares as collateral for personal loans—putting shareholders at risk. Citing “material risks” and potential conflicts of interest associated with the pledged stock, the country’s largest proxy voting advisor, ISS, is recommending shareholders withhold votes from the five directors who serve on the Board’s Audit Committee including the Independent Chairman of the Board.

“Allowing the company’s CEO and controlling shareholder Jerry Moyes to gamble nearly 25 percent of Swift’s total outstanding shares as collateral for his personal loans is indefensible,” said Ken Hall, Teamsters General Secretary-Treasurer, who called on the board to take immediate action. “It is vital that this board exercise its independence and authority to protect the interests of public shareholders.”

Swift Transportation will hold its annual shareholders' meeting on May 8 in Phoenix, Ariz. The Teamsters Union will be there to demand that the board put a stop to Moyes' risky behavior.

In 2003, a Teamster proposal calling for an independent chairman of the board at Swift received majority support by outside investors after the Teamsters highlighted the massive web of interlocking financial dealings between Swift and other Moyes-owned businesses. At the time, founder Jerry Moyes served as Swift’s Chairman of the Board, President and CEO.

In 2005, Moyes paid $1.5 million to settle an SEC insider-trading investigation at Swift and resigned from all of his leadership positions. He took the company private in 2007 and then public again in 2010—this time with a dual-class stock structure, providing himself 54.5 percent of the voting power for his 40.4 percent holdings of common stock.

“There needs to be meaningful board oversight and management accountability at Swift,” Hall said. “Someone needs to tell Jerry Moyes to stop using Swift’s corporate coffers as his own personal piggy bank.”