Company Name: AT&T Inc.
Public Availability Date: December 20, 2007
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
STAFF REPLY LETTER
[INQUIRY LETTER]
December 13, 2007
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: AT&T Inc. 2008 Annual Meeting Shareholder Proposal of F&C Management Ltd
Ladies and Gentlemen:
This letter supplements AT&T Inc.'s ("AT&T") letter to you dated November 30,
2007 (the "Prior Letter") relating to a shareholder proposal (the "Proposal")
submitted by F&C Management Ltd (the "Proponent"). The Proponent submitted the
Proposal as a cosponsor along with several other shareholder proponents. AT&T
intends to include the Proposal in its 2008 proxy materials. However, AT&T
intends to exclude the Proponent as a co-sponsor of the Proposal for the reasons
given in the Prior Letter.
Pursuant to Rule 14a-8(j), enclosed are six copies of this letter. A copy of
this letter is being mailed concurrently to the Proponent.
Please acknowledge receipt of this letter by date-stamping and returning the
extra enclosed copy of this letter in the enclosed, self-addressed envelope.
Sincerely,
/s/
Enclosures
cc: Mr. Pat M. Tomaino
F&C Management Ltd
[INQUIRY LETTER]
November 30, 2007
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: AT&T Inc. 2008 Annual Meeting Shareholder Proposal of F&C Management Ltd
Ladies and Gentlemen:
This statement and the material enclosed herewith are submitted on behalf of
AT&T Inc. ("AT&T" or the "Company") pursuant to Rule 14a-8(j) under the
Securities Exchange Act of 1934, as amended. On November 26, 2007, AT&T received
a shareholder proposal dated November 22, 2007. from F&C Management Ltd (the
"Proponent") for inclusion in AT&T's 2008 proxy materials. For the reason stated
below, AT&T intends to omit the proposal from its 2008 proxy statement.
Pursuant to Rule 14a-8(j), enclosed are six copies of each of this statement and
the Proponent's letter submitting the proposal. A copy of this letter is being
mailed concurrently to the Proponent advising it of AT&T's intention to omit the
proposal from its proxy materials for the 2008 Annual Meeting.
Background
On November 22, 2007, the Proponent faxed to Southwestern Bell Telephone
Company, a subsidiary of AT&T, a letter submitting a proposal addressed to Ann
E. Meuleman, Senior Vice President and Secretary of the Company (the "Fax"). The
fax number used by the Proponent to transmit the Fax is for an office of
Southwestern Bell Telephone Company located at 1010 Pine Street, St. Louis,
Missouri. The principal executive offices of the Company, including the office
of Ms. Meuleman, are located at 175 East Houston Street, San Antonio, Texas.
Proponent's original letter (the "Letter") was subsequently delivered by courier
to Ms. Mouleman at the Company's principal executive offices on November 26,
2007.
Discussion
AT&T believes that it may omit the proposal because neither the Fax nor the
Letter was received at the Company's principal executive offices by the
deadline. Pursuant to Rule 14a-8(e)(2), the "proposal must be received at the
company's principal executive offices not less than 120 calendar days before the
date of the company's proxy statement released to shareholders in connection
with the previous year's annual meeting." The deadline for submitting proposals
for inclusion in the proxy materials for AT&T's 2008 annual meeting was November
23, 2007, as noted in the Company's 2007 proxy statement. In Staff Legal
Bulletin No. 14C, the Staff of the Division of Corporation Finance (the "Staff")
has stated that if the proponent chooses to transmit its materials by facsimile,
the proponent is responsible for ensuring that it has obtained the correct
facsimile number for making such submissions. Furthermore, the Staff has
previously held that where a proposal was submitted by fax to a location other
than the company's principal executive offices and was not received at the
company's principal executive offices by the deadline, the proposal may be
excluded. See, The DirecTV Group (March 23, 2005). In the instant case, the Fax
was not sent to the Company's principal executive offices, and the Letter was
not received at the Company's principal executive offices until after the
deadline. Therefore, under Rule 14a-8(e)(2) and the Staff's interpretations
thereunder, the proposal may be excluded from AT&T's proxy materials.
Conclusion
Because neither the Fax nor the Letter was received at the Company's principal
executive offices by the deadline provided in Rule 14a-8(e)(2), it is my opinion
that AT&T may properly omit the proposal from its proxy materials for its 2008
Annual Meeting.
Please acknowledge receipt of this letter by date-stamping and returning the
extra enclosed copy of this letter in the enclosed, self-addressed envelope.
Sincerely,
/s/
Enclosures
cc: Mr. Pat M. Tomaino
F&C Management Ltd
[INQUIRY LETTER]
December 18, 2007
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
RE: AT&T Inc. 2008 Annual Meeting Shareholder Proposal of F&C Management Ltd.
Ladies and Gentlemen:
This statement is submitted on behalf of F&C Management Ltd ("F&C") in response
to AT&T Inc.'s ("AT&T" or the "Company") November 30th communication to the
Chief Counsel regarding F&C's attempt to co-file a shareholder proposal at the
Company's 2008 annual meeting.
F&C made a good-faith attempt to send necessary documentation in support of our
filing to the Company by the end of business on the deadline for shareholder
proposals (November 23, 2007). In accordance with the rules, F&C submitted
filing materials via fax on November 22nd (a federal holiday) for receipt on
November 23rd and subsequently express mailed identical paper documentation
which arrived on November 26th. The fax was official notification of F&C's
intent to file. However, despite reasonable offorts to contact the Company
through approved channels, lapses of external and internal communication on the
part of the Company prevented F&C's materials from reaching Ann Meuleman, the
designated AT&T officer, by November 23rd:
First, the fax number for the Company's San Antonio headquarters is not
published in the 2007 proxy statement1 nor on the Company's investor relations
website2. Without this information, F&C made a reasonable effort to find the
correct fax number from other reputable internet sources. Both Dow Jones
MarketWatch3 and Yahoo!Finance4 list 314-331-9896 (the number used by F&C) as
the fax number for the Company's headquarters corresponding to the same San
Antonio address given for Ms. Meuleman in the Company's filing instructions.
Considering these sources, and lacking information to the contrary from the
Company, F&C came to the reasonable conclusion that 314-331-9896 was the correct
fax number for the Company's headquarters and Ms. Meuleman.
Despite our efforts to identify the correct office, the fax was received on
the morning of November 23 in the offices of Southwestern Bell (a wholly-owned
subsidiary of the Company) in St. Louis. Southwestern Bell officials had an
entire business day on November 23rd to forward our communication to Ms.
Meuleman, the clearly-designated recipient, but did not. F&C finds it anomalous
that the offices of a wholly-owned subsidiary of AT&T would not relay fax
communications to a senior officer of the parent company in a timely fashion,
especially as it was related to an SEC regulatory matter.
As evidenced above, F&C made substantial and reasonable attempts to accurately
contact the Company regarding our attempt to co-file a shareholder proposal by
the designated filing deadline. The Company's motion to omit F&C as a co-filer
is therefore inappropriate considering significant obstacies facing F&C and
other investors who made reasonable efforts to contact the company via fax. We
ask that the Chief Counsel consider these arguments when reviewing the Company's
motion and find that AT&T may not property omit F&C's proposal.
Sincerely,
/s/
Pat M. Tomaino
Analyst, Governance & Sustainable Investment
cc: Paul Wilson, Senior Attorney, Legal Department, AT&T
Elizabeth McGeveran, Vice President, Governance and Sustainable Investment, F&C
-----FOOTNOTES-----
1 2007 Definitive proxy statement (Form DEF-14A): http://www.sec.gov/Archives/edgar/date/732717/000119312507061575/ddef14a.txt
2 AT&T Investor Relationa. `Investor Contects' http://www.att.com/gen/investor-relations?pld=5644
3 Dow Jones MarketWatch AT&T Inc. Profile http://www.marketwatch.com/tools/quotes/profile.asp?symb=T
4 Yahoo!Finance Profile for AT&T Inc. http://finance.yahoo.com/q/pr?s=t
[APPENDIX]
PROPOSAL
RESOLVED, the shareholders of AT&T hereby request that the Board include, as a
voting item printed in the proxy statement for each annual meeting of
stockholders, an advisory resolution proposing that stockholders approve or
disapprove the compensation of the named executive officers as set furth in the
proxy statement's Summary Compensation Table (the "SCT") and the accompanying
narrative disclosure of material factors provided to understand the SCT. The
board's proposal shall make clear that the vote is advisory and will not
abrogate any employment agreement.
SUPPORTING STATEMENT
We believe current rules governing senior executive compensation do not give
shareholders sufficient influence over pay practices - nor do they give the
Board adequate feedback from the owners of the company.
The advisory vote proposed here is similar to the shareholder vote required in
other countries, including the U.K., Australia and the Netherlands (which
requires a binding shareholder vote).
AT&T's Board has been criticized for excessive CEO pay relative to performance.
A study by The Corporate Library ("Pay for Failure: The Compensation Committees
Responsible," March 31, 2006) singled out AT&T as one of eleven large U.S.
companies "where the discoment between pay and performance is particularly
stark."
The study notes that over the five fiscal years through 2005, then-CEO Edward
Whitacre received $85.2 million in compensation, while total shareholder return
was negative 40.3%. The study stated that 100% LTIP payouts to Whitacre when
"shareholder wealth has been diminished by a third over the period goes against
common sense."
In our opinion, AT&T's executive pension and severance agreements stand out as
unjustifiably costly.
Whitacre received a $158.4 million pension package when he retired last June,
the highest pension benefit for any U.S. chief executive, according to Pensions
& Investments ("Pension Goldmine Awaits AT&T, Occidental CEOs," April 2, 2007).
This included $83.3 million in Senior Executive Retirement Plan (SERP)
accumulations.
Whitacre's pension package was more than 25 times greater than the median
combined pension and deferred compensation package of 485 public companies
analyzed last year by the Corporate Library.
In case this platinum pension wasn't enough, Whitacre's golden parachute
("change in control severance payments") would have included $23.2 million in
lump sum severance, $20.1 million in tax reimbursements, and $67.6 million in
accelerated performance share vesting "whether or not the executive's employment
is terminated" (2007 proxy statement).
The Board also targeted Whitacre's base salary, target bonus and long-term
equity at the 75\th/ percentile of the market. According to Institutional
Shareholder Services, "such practice has the Lake Wobegon effect of ratcheting
CEO compensation since CEOs are like the children of Lake Wobegon, all of them
are above average."
The board did not limit its generosity to Whitacre. After just 5 years at AT&T,
former CEO David Dorman left with a yearly pension of $2.1 million and his own
$25 million parachute. Compare this to the freezing of the AT&T's rank-and-file
pension plan.
AT&T's new CEO, Randall Stephenson, continues the trend. His change in control
severance package would be in excess of $16.5 million.
Please vote FOR this proposal.
[STAFF REPLY LETTER]
December 20, 2007
Response of the Office of Chief Counsel Division of Corporation Finance
Re: AT&T Inc. Incoming letter dated November 30, 2007
The proposal relates to an advisory shareholder vote regarding executive
compensation.
There appears to be some basis for your view that AT&T may exclude F&C
Management Ltd. as a co-proponent of the proposal under rule 14a-8(c)(2) because
AT&T received it after the deadline for submitting proposals. We note in
particular your representation that AT&T received the proposal after this
deadline and that the facsimile number used for delivery is not a facsimile
number at AT&T's principal executive offices. Accordingly, we will not recommend
enforcement action to the Commission if AT&T omits F&C Management Ltd. as a
co-proponent in reliance on rule 14a-8(e)(2).
Sincerely,
/s/
Peggy Kim
Attorney-Adviser
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