Union Bid for Seat on Gas Co. Board Appears Defeated
A group of Pacific Enterprises workers apparently failed to elect one of their union officials to one of 15 board positions of the parent company of Southern California Gas on Thursday, but the union refused to concede the hotly contested proxy fight.
Although a count of the ballots may not be complete until sometime today, Paul A. Miller, Pacific Enterprises chairman and chief executive, told stockholders at the annual meeting, “It appears certain that each of the (15) incumbent directors has been elected.”
However, the union candidate, Sam Weinstein, western regional director of the Utility Workers of America union, challenged Miller’s statement.
“Almost certain is not certain,” he said. In any event, if he lost the spirited proxy contest, Weinstein said, “we will be back next year. And we will win next year.” The issue of whether workers who own stock in a company should have some voice in running the company “won’t go away.”
Miller said it was not possible to get a complete count Thursday because a large number of proxies were turned in during the annual meeting at the Regent Beverly Wilshire Hotel and most of those proxies did not indicate the number of shares owned. Pacific Enterprises Executive Vice President Willis B. Wood said later that officials could see that the number of proxies where the exact number of shares voted was unclear would not be enough to elect Weinstein.
A record number of shares--almost 90% of the company’s 64.3 million outstanding shares--were represented at the meeting, Miller said.
“We surprised them,” Weinstein said. “They were not expecting a large vote. I think this proves that the position that they have taken that someone with a union background isn’t suitable for the board is antiquated and not attuned to the times.”
Weinstein said he believed that the workers’ committee received votes from at least three institutional holders, including New York’s Chase Manhattan Bank, which voted shares for him on behalf of an unidentified institutional holder. And Weinstein said pension plans owning stock in the company were “very receptive” to his bid for a board seat.
The union, which represents about 6,000 of some 9,000 workers at Southern California Gas, used more than 150 volunteers to solicit proxies on behalf of Weinstein. Its campaign was expected to cost $20,000. Questioned during the meeting, company officials said they expect the firm to have expenses of $260,000 for the proxy contest.
‘Hasty’ Plan
The union and the company are also battling in the courts over Pacific Enterprises’ refusal to give the union the names and addresses of employees in the stock ownership plan, which is limited to Pacific’s Gas Co. workers. The first round in that fight went to Pacific Enterprises, but the union is appealing the federal court decision.
The workers thought that they had a chance to elect Weinstein because voting rules allowed the holder of one share to all 15 director votes for a single candidate.
Weinstein’s appeal to shareholders at the meeting concentrated on shareholder rights rather than worker rights. He said the company had persisted with a “hasty” diversification plan that resulted in a drop in the share price. The stock dropped from a 1987 high of $60 to $35.625 a share earlier this year. The stock closed at $42.50 Thursday.
“It’s time to get back to making money,” Weinstein told stockholders.
The company blamed the stock price drop on recent acquisitions. In addition to Southern California Gas, the company owns Thrifty Corp., a drug store chain, and Pay ‘n Save and has interests in both oil and gas companies.
“The need to change and grow is really at the heart of our diversification strategy,” Miller said. “Far from being a risky, adventuresome one, our diversification program is conservative, in that a key element is to counter economic uncertainties and spread the risk of any one given business.”
