Utility parent’s investors approve election proposal

Sierra Pacific Resources shareholders have approved a proposal that urges the board to consider holding elections for all directors each year, ending the practice of staggering director terms so that only one-third of the board is elected each year.

Chief Executive Officer Michael Yackira said he didn't know whether the board would follow the recommendation or when it might make a decision.

"I can't tell you what the board may or may not do," Yackira said.

The board decision probably will be disclosed in connection with the next annual meeting, Yackira said.

The board opposed the shareholder recommendation in the proxy sent to stockholders before the annual meeting, which was held Monday at the Las Vegas Hilton.

Out of 233 voting shares, 134 million, or 58 percent, were voted for the proposal, the company announced at the meeting.

Gerald Armstrong, a Colorado investor who owns 138 shares in Sierra, made the successful proposal. His attorney, Russell Gubler, made a short presentation to the 50 shareholders present at the meeting.

Gubler explained that one-third of the Sierra directors are elected each year. As a result, dissident shareholders can elect only a minority of the board in any one year.

Staggered elections are "not in the best interest of shareholders because it reduces accountability," Armstrong argued in the proxy.

Studies by Harvard Business School and the University of Pennsylvania's Wharton School showed a link between performance and corporate governance issues, such as annual directors' elections, Gubler said.

The company didn't comment about the proposal during the meeting, but the proxy said the board unanimously opposed the measure "that could result in 'on the job training' for the entire board." Sierra said staggered three-year terms provides "an appropriate balance between stability and continuity."

Attempts to reach Armstrong failed Monday.

Armstrong may belong to a group of shareholder activists that want corporations generally to be more responsive to shareholders, said one analyst speaking on condition of anonymity.

Or he could be representing institutional shareholders, such as Horizon Asset Management, the New York investment firm that, together with an affiliate, owns 29 percent of Sierra's shares.

But the analyst suggested Horizon could approach Sierra management and the board directly, rather than through a shareholder proposal.

Former state consumer advocate Tim Hay said: "Obviously, it's a repudiation of the management of the company by institutional investors."

He noted that Sierra shares closed on the New York Stock Exchange at $13.89 on Monday, down from a 52-week high of $19.60.

Sierra Pacific Resources shares fell 25 cents, or 1.8 percent, Tuesday to close at $13.64.

Institutional investors own 86 percent of Sierra Pacific Resources' outstanding shares.

Shareholders elected Phil Satre, Glenn Christenson and Joseph Anderson Jr. as directors.

After the shareholder meeting, the board also elected Maureen Mullarkey, former chief financial officer of International Game Technology, to the board. She is filling a vacancy created after proxy materials were prepared, making it too late for a vote of shareholders, a company spokesman said.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.