Davis and board still seated at Par
All 15 directors of the entertainment and publishing company received about 98% of the votes from the approximately 150 shareholders or proxy voters present , said company spokesman Carl Folta. There was no discussion prior to the vote.
'Narrow issue'
"I think the criticism was on a pretty narrow issue. The general stockholders didn't share one narrow group's view," said Samuel Silberman, chairman of the Compensation Committee.
At the meeting, Davis fielded questions on Paramount's $ 1.2 billion cash horde. Asked about possible interest in the publishing operations of the late Robert Maxwell, Davis said the company was "rumored to be a potential buyer."
Asked if Par has had any discussions with Turner Broadcasting Systems, Davis also declined to comment.
The Wisconsin public pension fund wanted to unseat the committee because executives continued to receive compensation increases despite sluggish stock performance.
However, letters asking shareholders to vote against the four directors on the company's compensation committee went out just one week before the meeting and may have reached shareholders after they cast their votes by proxy, said Kurt Schact, general council for the State of Wisconsin Investment Board, which owns 100,000 of 118 million shares outstanding.
Although none of the officers was defeated, Schact said his organization still sent a message to Paramount executives that high salaries and bonuses won't be tolerated when stock is performing flatly.
Salary, bonus
Davis had a salary and bonus totalling $ 3.6 million last year, up from about $ 2.8 million a year earlier. Also, five executives, including Davis, were given bonuses totalling $ 8 million, according to the proxy statement mailed to shareholders.
While Schact claimed Paramount stock underperformed the Standard & Poor's 500 -stock index by about 40% last year, the company noted in its proxy material that Par underperformed a self-selected group of peer stocks by about 30% during the past five years.
But Paramount officials said compensation should be based on growth in operating income, which more than doubled in the last fiscal year, and return on operating assets, which grew about 16%.
Davis said he hopes to expand the company's film distribution to 20-25 films annually.
Pix can boost performance
Jessica Reif, who follows Paramount stock for Oppenheimer and Co., said the company could revive its sluggish theater profits if this year's big-budget films do well.
"These films aren't inexpensive. Four or five big films in a row will fuel them immensely. If one or two are big disasters, the stock could be vulnerable," Reif said.
Paramount said it decided to hold its annual meeting in Indianapolis because of its computer publishing and book distribution operations here as well as the proximity of its Kings Island theme park near Cincinnati.
