Trade unions ask shareholders to vote against Michael Dell

The AFL-CIO and AFSCME point to Dell's SEC settlement and the CEO's salary

Two labor unions have asked Dell shareholders to withhold their votes for Chairman and CEO Michael Dell to remain as a director on the company's board following a US$100 million accounting practices settlement the company made with the U.S. Securities and Exchange Commission.

The AFL-CIO and American Federation of State, County, and Municipal Employees (AFSCME), in a letter to shareholders sent Tuesday, also suggest that Michael Dell's executive compensation package was excessive during the past decade. Dell, who founded the company in 1984, received more than $450 million, including money through stock option sales, from his company from 2000 to 2009, while his company's stock value dropped 66 percent in the same time period, the labor unions said in the letter.

"Based on the allegations in the SEC's complaint against our Company and Michael Dell, we believe that shareholders would be better served by the removal of Michael Dell as the Chairman of our Company's Board of Directors," the letter said. "By voting to 'WITHHOLD' from Michael Dell, you can encourage the Board of Directors to appoint a new Chairman."

The letter asks shareholders to withhold their vote from Michael Dell during a shareholders meeting Aug. 12. Under Dell's corporate governance rules, Michael Dell would be required to offer his resignation if he does not receive a majority vote, said Brandon Rees, deputy director of the AFL-CIO Office of Investment. The Dell board would then consider whether to accept the resignation.

The unions hold a significant amount of Dell stock, the letter said. The AFSCME Employees Pension Plan holds 48,483 shares and the AFL-CIO Reserve Fund holds 1,302 shares, Rees said. Union members also participate in pension plans that hold Dell stock, he added.

In announcing the SEC settlement, Dell's board reaffirmed its "unanimous support" for Michael Dell's leadership, said Jess Blackburn, a Dell spokesman.

The labor unions' references to Dell's compensation are "misleading," Blackburn added. "In fact, he has not received a bonus from the company for four years and hasn't been granted stock or stock options for six years," he said. "His compensation total was primarily the result of expiring stock options from the 1990s that he exercised in 2000, 2001 and 2005."

Dell reached a settlement with the SEC in July over the company's accounting and financial reporting requirements. The settlement did not restrict Michael Dell's role as an officer or director of the company, and the company did not admit wrongdoing in the settlement.

The SEC had alleged that the company did not properly disclose payments from Intel for the computer maker's exclusive use of Intel CPUs. The Intel payments grow from 10 percent of Dell's operating income in fiscal year 2003 to 76 percent in the first quarter of fiscal year 2007, the SEC said in its complaint.

The SEC has also accused Dell of manipulating reserve accounts to cover shortfalls in operating results between 2002 and 2005.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantusG. Grant's e-mail address is grant_gross@idg.com.

Join the Good Gear Guide newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags Brandon ReesU.S. Securities and Exchange CommissionDellAFL-CIOJess BlackburnMIchael DellSEC Filingsgovernment

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Grant Gross

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Armand Abogado

HP OfficeJet 250 Mobile Printer

Wireless printing from my iPhone was also a handy feature, the whole experience was quick and seamless with no setup requirements - accessed through the default iOS printing menu options.

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?