Member Employer News

AT&T Mobility

Contract Expires: February 09, 2013

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AT&T Proxy Recommendations

April 2, 2011

The CWA Research Department has provided the following information:

Here is the proxy review from Research. There are 8 issues. Items 1 & 2 are Board and auditor elections. Items 3, 4, & 5 relate to the adoption of an incentive plan and the frequency of review. Item 6 requires disclosure of political contributions. Items 7 & 8 are governance issues on shareholders ability to call a special meeting. The review of each item indicates the typical shareholder issues at stake in that issue.

We’ve used shareholder votes for different purposes in the past. The last conversation amongst the VPs as I recall, was one where most did not want to focus on shareholder issues.

Therefore, in terms of a recommendation then, I’d suggest voting yes on item 6.

ATT Proxy Review -- 2011

Item 1: Election of 12 directors In 2010 the Company’s directors received between 96-98% support from shareholders. A no vote could be justified based on the poor compensation practices (see below), but given pending T-Mobile merger, a vote to abstain or yes vote might be reasonable.

Item 2: Approve auditor Not aware of any controversies with auditor, Ernst & Young, although company has been AT&T’s auditor since 1983 and it is not considered best practice to retain the same auditor over that length of time.

Item 3: Approve 2011 Incentive plan This plan will replace the existing 2006 plan. In the absence of a detailed review of the plan (or comparison with the 2006 plan), a negative vote could be warranted based on the pay practices that AT&T engages in, such as generous incentive award payouts based on minimal performance targets (see Item 4 below).

Item 4: Advisory Vote on Executive Compensation The Company has excessive executive compensation – the CEO’s total compensation for 2010 was $27.3 million (includes $12.7 m in stock awards and $7 m in pension value increases), with the 4 other executives all between $8.6-10.9 million. This is on the high end for a S&P 500 company. While AT&T’s share price outperformed the S&P 500 index as a whole (increasing from a $100 baseline in Dec 2005 to $156 in Dec 2010, versus $112 for S&P 500 index), it fell short of 500 index companies in the telecom sector, which reached $168 in the same period. In addition, some incentive compensation payouts are provided when the company total shareholder return meets between 20-40% of peer group median – 50% of the target total. If this measure is sufficient to fall in the 40-60% peer group range, 100% of the incentive target is paid.

Item 5: Frequency of Advisory Vote on Executive Compensation Shareholders have the option of voting for intervals of 1, 2 or 3 years. The Company recommended a 3 year frequency, but institutional investors have always sought an annual vote as the most effective mechanism for holding corporations accountable for the compensation policies, which can change from year to year based on new policies or the hiring of new executives with outsized pay packages.

Item 6: Political Contributions Disclosure (shareholder proposal) This proposal requires the company to disclose corporate contributions (as opposed to PAC contributions) and trade association dues and detail the policies and procedures that govern oversight of these expenditures. Institutional investors have pushed for companies to provide greater transparency and accountability for how political expenditures have been used, including trade associations dues (such as those for the US Chamber of Commerce). CWA is sponsoring this proposal in 2011 at CenturyLink, Comcast and Windstream.

Item 7: Special Shareholder Meetings (shareholder proposal) This proposal would allow a special shareholder meeting to be called (outside of the regular annual meeting) if 10% of shareholders request such a meeting. Although rarely used, this provision provides protection for minority shareholders to raise important issues in cases where waiting until the annual meeting may make the issue moot (mergers, new directors, etc.). Institutional investors, however, do not generally make this proposal a priority for sponsorship, preferring to focus on larger shareholder rights issues---such as board declassification and majority voting---to use in maintaining board accountability with corporations.

Item 8: Shareholder Action by Written Consent (shareholder proposal) This proposal would allow for shareholders to act by written consent (with a majority of shareholders) outside of an annual or special shareholder meeting. This provides protection for shareholders to raise issues in special circumstances, although it is rarely used. Similar to the special shareholder meeting proposal also on this year’s AT&T proxy, institutional investors usually do not focus on these issues when sponsoring shareholder proposals.

If you have further questions, contact George Kohl or Annie Hill.

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An Important Message from CWA

October 09, 2010

"We support health care reform- but taxing our benefits isn't the way to pay for it [More].

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AT&T Mobility- CWA National Health Care Decision 12.16.08

June 12, 2009

[PDF]

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2009 CWA & AT&T Contract

May 21, 2009

[PDF]

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Arbitration Ruling on Health Care Benefits -Postponed until Dec. 12th

An arbitration ruling on health care benefits for 40,000 CWA members at AT&T Mobility has been postponed until Dec. 12.

The decision was originally expected to be handed down by Nov. 21, but the arbitrator requested more time, CWA National Telecom Director Bill Bates said.

The case involves the company's attempt to make workers pick up a significantly larger share of their health care costs. In a three-day arbitration hearing in September, CWA leaders said AT&T's position was unacceptable and unreasonable, given the company's financial health.

CWA's agreement with AT&T Mobility provides for binding arbitration to resolve disputes in the health care plan. Four separate contracts cover CWA members at Mobility but all share the same benefit plans.

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AT&T Bargaining Council Meetings Set Stage for '09 Talks

"One Union, One Fight, One Future" is theme for AT&T bargaining council meetings this week in Dallas. Pres. Cohen, at right, told participants: "If we go in with a sense of unity, we couldn't be stronger."

Determined to bring the same energy to bargaining with AT&T that their members brought to the 2008 political campaigns, local CWA leaders from across the country met this week in Dallas to prepare for talks with the telecom giant beginning in early 2009.

Although negotiations for AT&T Core will take place at six tables, in addition to bargaining for AT&T Mobility's "Orange" contract, the theme of the bargaining council meetings was one of solidarity: "One Union, One Fight, One Future."

"If we go in with a sense of unity, we couldn't be stronger," CWA President Larry Cohen told the 300 participants as he opened the conference Monday night. "This union is sending a signal that we're fighting back. We're mad but we're hopeful and we're on the march. And we'll be on the march until every worker has a decent contract."

Contracting out of work, changes in job titles and job descriptions and other job security issues surrounding AT&T's consolidation of various former Bell companies were major concerns for participants, along with the enormous economic challenges facing the country and the never-ending attempts to rollback health care benefits for workers and retirees.

Not all issues affect each geographic region the same way, and CWA national leaders said they understand that locals and districts have developed their own ways of doing business with the company over the years. "We're family, and like family, we may have some disagreements," CWA Executive Vice President Annie Hill said. "But we need to leave with a sense of purpose about what we want to accomplish and recognize that we're all in this together."

Ensuring that CWA's contracts keep pace with the rapid changes in technology and wireless expansion is a key bargaining issue, and conference speakers and local officers in attendance said that it's vital that the union be vigilant. Telecom expert Andrew Saybold discussed technological changes on the horizon, noting that there will always be jobs – even if they are fewer in number – for landline workers. "Spectrum is a finite resource," he said. "There's not enough wireless spectrum in the world to replace wired."

He went on to discuss what the future holds and what AT&T is and isn't doing to compete. Notably, he said the company leaders "don't get it" with regard to fiber to the home. "If they don't wake up and start doing fiber seriously, they're going to be in trouble," he said. "Whatever you do, you've got to figure out how to get AT&T into the fiber business, and quickly."

For CWA, bargaining with AT&T coincides with its two biggest legislative campaigns – passage of the Employee Free Choice Act and health care reform. But working toward passing the vital bills won't stop CWA from fighting just as hard as ever for workers' rights and health care issues during negotiations, national leaders said.

The AT&T Mobility bargaining will begin first, on Jan. 21, 2009, in Richmond, Va., The current Mobility "Orange" contract expires Feb. 7.

The Core talks will take place at six tables around the country beginning Feb. 24 to negotiate with AT&T Legacy, and with five regional contracts: AT&T East (formerly SNET), AT&T West (formerly PacBell), AT&T Midwest (formerly Ameritech) AT&T South (formerly Southwestern Bell) and AT&T Southeast (formerly BellSouth). All contracts expire April 4, except for AT&T Southeast, which expires in August -- but bargaining there will be held in unison with the other companies.

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