Dell Shareholders Reject Union Proposals

Thursday, Aug 12, 2010  |  Updated 3:07 PM CDT
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Dell Shareholders Reject Union Proposals

AP

Michael Dell re-elected to board.

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Dell Inc. shareholders voted Thursday to reject a union proposal that shareholders be given an "advisory" vote on pay for Dell executives, and re-elected CEO Michael Dell to the board.

The executive compensation proposal was put forward by the AFL-CIO Reserve Fund. Several other companies have passed similar measures, which give shareholders a symbolic role in approving compensation plans.

Dell shareholders also turned down a proposal to reimburse certain expenses for shareholders who want to put up their own candidate for the board of directors. That proposal came from the pension plan managers of the American Federation of State, County and Municipal Employees.

The labor groups also wanted to strip Michael Dell of his position as chairman, in the wake of charges that the company pumped up its earnings reports with undisclosed payments from chip maker Intel Corp.

The shareholder meeting had been delayed from July 16, when Dell said it had proposed a settlement to the staff of the Securities and Exchange Commission over those charges. Dell said it wanted to give shareholders a chance to consider the settlement.

Dell has already set aside $100 million to cover the cost of the settlement. The Round Rock, Texas-based company first disclosed an internal investigation into its accounting in 2006, and said it was notified in August of that year of an SEC inquiry into its revenue accounting and financial reporting. In 2007, it restated four years of results after it found that sales had been overstated by $359 million and income by $92 million.

Dell has said that a settlement would include charges of fraud due to negligence and non-fraud-based charges connected to disclosures and alleged omissions that occurred before fiscal 2008. At issue are rebates that Dell received from chip maker Intel Corp.

Michael Dell faces similar charges. The company has previously disclosed that a settlement would include a fine, but it would not prevent the CEO from working as an officer or director of a public company and "would be made without admitting or denying the SEC's allegations." The company has decided that Dell will continue to work for the company.

Dell shares fell 9 cents to $12.01 in morning trading.

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