Savage’s Fate Left to Investors
Qualcomm Inc. shareholders will determine today whether to re-elect Enron Corp. board member Frank Savage to the telecommunications giant’s board.
Savage, who has served as a Qualcomm director since 1996, faces opposition from the California Public Employees’ Retirement System, a major Qualcomm shareholder, and the AFL-CIO.
“Mr. Savage has worked diligently for the shareholders of Qualcomm and intends to continue to serve as one of its directors,” said Savage’s attorney, W. Neil Eggleston.
Savage is one of many Enron directors and executives whose roles in other companies are undergoing scrutiny as the Houston energy trading company collapses amid federal regulatory and congressional probes into possible wrongdoing by senior Enron officials.
Two former Enron board members have bowed out of other board positions, including Wendy Lee Gramm, who resigned last week as a director with Invesco Funds, and Robert Jaedicke, who last month left the board of the California Water Services Group.
CalPERS, which owns 3.2 million shares of San Diego-based Qualcomm, said Monday it had cast its votes against Savage. CalPERS spokeswoman Pat Macht said the Enron imbroglio “raised considerable questions about the competence of Enron directors.”
Savage’s duties on four other boards and his role in managing Enron’s bankruptcies also make it “doubtful he would be able to spend quality time on the Enron board,” Macht said.
Savage’s candidacy also is opposed by the AFL-CIO, the major union organization whose members own 3.1 million Enron shares through their benefits funds. The Washington-based group began lobbying companies in January to eject Enron officials from their boards.
“Investors can’t afford another Enron,” said Andrew L. Stern, president of the Service Employees International Union and a member of the AFL-CIO. “Qualcomm should show good governance and restore investor confidence by asking Frank Savage to step down off the board.”
Qualcomm spokeswoman Christine Trimble said Savage “has served with integrity” on the company’s 13-member board. She said Qualcomm will continue to monitor the situation.
