A group of Southern California Gas Co. workers came close to electing one of their union officials to the board of the gas company’s parent firm, Los Angeles-based Pacific Enterprises, a vote tally made available by the company Friday showed.
Sam K. Weinstein, Western regional director of the Utility Workers of America union, received 41.6% of the votes cast during Pacific Enterprises’ annual meeting Thursday at the Regent Beverly Wilshire Hotel.
The strong showing for Weinstein was the result of California’s cumulative corporate voting law, which allowed Pacific stockholders to vote 15 times for Weinstein if they didn’t vote for any of the incumbent directors on the company’s slate. At the same time, holders who wished to vote for the company’s choices had cast one vote for each of the 15 directors up for reelection.
Employing the “single shot” strategy, the workers, who are also Pacific Enterprises shareholders, collected 40.2 million votes for Weinstein even though only 4.5%, or about 2.7 million of about 59 million shares voted during the meeting, were cast in Weinstein’s favor. The company’s slate won reelection with 56.4 million votes.
The heated proxy fight cost the company at least $260,000 to defeat Weinstein. The contest drew a record turnout at the annual meeting. More than 90% of the company’s 64.3 million shares outstanding were voted.
The company Friday tried to make the most of the outcome by emphasizing that its slate won the overwhelming majority of the shares cast. “I believe this vote represents an endorsement of our diversification strategy,” Paul A. Miller, Pacific Enterprises chairman and chief executive, said in a statement.
Weinstein, a former Southern California Gas worker, had sharply criticized the company’s diversification strategy as the cause of significant declines in the company’s stock price. In addition to Southern California Gas, Pacific owns Thrifty Corp., a drug and discount store chain purchased in 1986. Last year it acquired Pay ‘n’ Save drugstores, Bi-Mart discount stores and Sabine Corp., an oil and gas exploration and development concern.
The company and the union disagreed over how close Weinstein came to victory Thursday. The company said he needed more than 1 million additional shares cast in his favor, but Weinstein insisted that he needed only 700,000. “It doesn’t make a heck of a lot of difference,” Weinstein said. “The fact is that it was so close that there isn’t going to be a problem for us to come back next year and win.”
Among Pacific Enterprises directors reelected were former U.S. Atty. Gen. William French Smith and Donald B. Rice, president and chief executive of Santa Monica’s RAND Corp., who is widely rumored to be the leading candidate for secretary of the Air Force.