UNION PACIFIC CORPORATION | Adoption of a policy limiting severance payments at UNION PACIFIC CORPORATION

Status
AGM passed
AGM date
Previous AGM date
Proposal number
4
Resolution details
Company ticker
UNP
Lead filer
Individual
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Remuneration or pay
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Industrials
Company HQ country
United States
Resolved clause
Resolved: Shareholders request that the Board adopt a policy to seek shareholder approval of any senior managerÕs new or renewed pay package that provides for severance or termination payments with an estimated value exceeding 2.99 times the sum of the executiveÕs base salary plus target short-term bonus. This proposal only applies to the Named Executive Officers.
Whereas clause
Whereas: Golden parachute payments include cash, equity or other compensation that is paid out or vests due to a senior executiveÕs termination for any reason. Payments include those provided under employment agreements, severance plans, and change-in-control clauses in long-term equity plans, but not life insurance, pension benefits, or deferred compensation earned and vested prior to termination.
ÒEstimated total valueÓ includes: lump-sum payments; payments offsetting tax liabilities, perquisites or benefits not vested under a plan generally available to management employees, post-employment consulting fees or office expense; and equity awards if vesting is accelerated, or a performance condition waived, due to termination.
The Board shall retain the option to seek shareholder approval after material terms are agreed upon.
Generous performance-based pay can sometimes be justified but shareholder ratification of golden parachutes better aligns management pay with shareholder interests.
This proposal is relevant even if there are current golden parachute limits. A limit on golden parachutes is like a speed limit. A speed limit by itself does not guarantee that the speed limit will never be exceeded. Like this proposal the rules associated with a speed limit provide consequences if the limit is exceeded. With this proposal the consequences are a non-binding shareholder vote is required for unreasonably high golden parachutes.
This proposal places no limit on long-term equity pay or any other type pay. This proposal thus has no impact on the ability to attract executive talent or discourage the use of long-term equity pay because it places no limit on golden parachutes. It simply requires that extra large golden parachutes be subject to a non-binding shareholder vote at a shareholder meeting already scheduled for other matters.
This proposal is relevant because the annual say on executive pay vote does not have a separate section for approving or rejecting golden parachutes.
This proposal topic also received between 51% and 65% support at:
FedEx
Spirit AeroSystems
Alaska Air
Fiserv
In 2023 Mr. Lance Fritz could have potentially could have been entitled to a $40 million Union Pacific golden parachute.
Supporting statement


Filed by John Chevedden

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