Company Name: General Motors Corp.
Public Availability Date: March 24, 2006
Document Sections:
INQUIRY LETTER
APPENDIX
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
February 7, 2006
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
This is a filing, pursuant to Rule 14a-8(j), to omit the proposal received on
August 18, 2005 from Robert D. Morse (Exhibit A) from the General Motors
Corporation proxy materials for the 2006 Annual Meeting of Stockholders. The
proposal states:
I propose that the Directors eliminate all remuneration for any one of
Management in an amount above $500,000.00 per year. This excludes minor perks
and necessary insurance. Like wise, no severance contracts are to be made.
General Motors intends to omit the proposal under Rule 14a-8(i)(7) (deals with a
matter related to the company's ordinary business operations).
The Commission has stated that one of the principles underlying this exclusion
for ordinary business operations in Rule 14a-8(i)(7) is that "[c]ertain tasks
are so fundamental to management's ability to run a company on a day-to-day
basis that they could not, as a practical matter, be subject to direct
shareholder oversight." See Exchange Act Release No. 40018 (May 21, 1998). The
same release made it clear that proposals dealing with "the management of the
workforce, such as the hiring, promotion, and termination of employees," relate
to ordinary business matters. The proposal refers to compensation for "any one
of Management" without further describing that group. In Staff Legal Bulletin
No. 14A (July 12, 2002), the Staff described its "bright-line analysis" applied
to determine if proposals concerning compensation deal with ordinary business
matters:
We agree with the view of companies that they may exclude proposals that
relate to general employee compensation matters in reliance on rule 14a-8(i)(7);
and
We do not agree with the view of companies that they may exclude proposals
that concern only senior executives and director compensation in reliance on
rule 14a-8(i)(7).
The current proposal is intended to apply to "Management". Under the bright-line
analysis of the Staff, proposals that apply to management are considered to
include more individuals than simply senior executives. In Xcel Energy, Inc.
(February 6, 2004), the Staff took a no-action position toward omission of a
proposal that related to the compensation of the president, vice presidents, the
CEO, the CFO, and "all levels of top management" (as quoted in the no-action
letter from the proposal), on the grounds that rule 14a-8(i)(7) permits
exclusion of proposals "relating to ordinary business operations (i.e., general
compensation matters)". See also, e.g., AmSouth Bancorporation (January 12,
2006); Amazon.com, Inc., (March 7, 2005). Unlike the proposal in Excel Energy,
which referred to "levels of top management," the current proposal emphatically
is not limited to "top management", referring instead to "any one of
Management." While it is not clear which GM employees would be considered
"Management" any executive? any one in a supervisory capacity?it is obvious
from this inclusive language that the group is intended to extend significantly
beyond senior executives. As a result, the proposal falls on the "general
employee compensation matters" side of the Staff's bright line, and is therefore
excludible under Rule 14a-8(i)(7).
Please inform us whether the Staff will recommend any enforcement action if this
proposal is omitted from the proxy materials for General Motors' 2006 Annual
Meeting of Stockholders. GM plans to begin printing its proxy material at the
beginning of April. We would appreciate any assistance you can give us in
meeting our schedule.
Sincerely yours,
/s/
Anne T. Larin
Attorney and Assistant Secretary
Enclosure
c: Robert D. Morse
[APPENDIX]
Office of The Secretary
General Motors Corporation
MC 482-C38-B71 br>
Detroit, MI 48265-3000
Dear Secretary:
I, Robert D. Morse, of 212 Highland Ave., Moorestown, NJ 08057-2717, owner of
$2000.00 or more of General Motors Corporation stock for over one year, wish to
present the following proposal to be printed in the Year 2006 Proxy Materials
for a vote. I will attempt to be represented at the meeting, and shall hold
equity until after that time.
PROPOSAL
I propose that the Directors eliminate all remuneration for any one of
Management in an amount above $500,000.00 per year. This excludes minor perks
and necessary insurance. Like wise, no severance contracts are to be made.
REASONING:
If a person becomes unsatisfactory or unnecessary, it is not a necessity that
they be paid to leave. It is possible for a person to enjoy a profitable and
enjoyable life with the proposed amount, and even to underwrite their own
retirement plan. The Proxy is required to publish remuneration of only five
upper Management personnel. YOUR assets are being constantly diverted for
Management's gain. Most asset gains are the result of a good product or service,
produced by the workers, successful advertising, and acceptance by the public
market. Just being in a Management position does not materially affect these
results, as companies seldom founder due to a changeover.
EXPLANATION:
The Directors are the group responsible for the need of this Proposal, as they
determine remuneration, and under "Plurality" voting rules, cannot be defeated
for election, even if only one vote "For" is received each, for the number of
nominees presented. It is suggested that shareowners look deeper into why they
are denied the "Right of Dissent"; but ONLY in the Vote for Directors column.
It, This is unconstitutional! The choice of "Against" was removed about Year
1975. You are asked to take a closer look to be knowledgeable for your voting
decisions, as Management usually nominates Directors.
NOTE: Ford Motor Company agreed to return "Against" three years ago, showing the
"American Way" spirit as a fine U.S. Corporation.
The Coca Cola Company eliminated "SAR's, severance packages, and options awards
as far back as 1998. The above actions are commendable.
----End of Proposal----
PS: I have all the copies of "Rules" I need. Recall the 26 pages "National
Paperwork Recovery Act"?
Sincerely,
Robert D. Morse.
/s/
[INQUIRY LETTER]
February 9, 2006
SECURITIES AND EXCHANGE COMMISSION
Division of Corporation Finance
450 Fifth St. NW.
Washington, DC 20549
Re: Letter from General Motors Dated February 7, 2006
Ladies and Gentlemen:
Rule 14a-8[i][7] is purposely being misapplied in this instance.
Matters of remuneration are NOT "ordinary business operations". Business
operations are just what the name implies. Payments made to the top five
Officers and the Directors are side issues, reportable in the proxy materials to
shareowners, and therefore available to our input of a proposal regarding them
and the amounts thereof.
I quote the second of the noted "bright line analysis" as being the correct
status of my proposal: *We do not agree with the view of companies that they may
exclude proposals that concern only senior executives and director compensation
in reliance on rule 14a8[i][7]".
The quotation on page 2, first paragraph, line 9 "---the current proposal
emphatically is not limited to "top management" etc." is another misstatement,
in that only the top 5 of management are named in a proxy, along with the
directors, in the manner of remuneration.
All the other corporations mentioned quoted decisions do not apply to my
proposal.
Thank you for your interest.
6 Copies to S.E.C.
1 copy to General Motors.
Rhymes for stress relief
Not part of presentation
Exhibit of excess remuneration.
Robert D. Morse
/s/
[STAFF REPLY LETTER]
March 24, 2006
Response of the Office of Chief Counsel Division of Corporation Finance
Re: General Motors Corporation Incoming letter dated February 7, 2006
The proposal calls for GM to eliminate all management remuneration in excess of
$500,000 per year and to refrain from making severance contracts.
There appears to be some basis for your view that GM may exclude the proposal
under rule 14a-8(i)(7), as relating to GM's ordinary business operations (i.e.,
general compensation matters). Accordingly, we will not recommend enforcement
action to the Commission if GM omits the proposal from its proxy materials in
reliance on rule 14a-8(i)(7).
Sincerely,
/s/
Mark F. Vilardo
Special Counsel
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