The Laborers' International Union of North America has filed a new proposal that urges Toll Brothers and three other firms to adopt a detailed CEO succession policy and disclose it to shareholders.
The proposal asks that the board collaborate with the current CEO on succession planning to develop criteria for the job, identify internal candidates, and institute a formal process to evaluate candidates. The Laborers also filed the resolution at Merrill Lynch, Bank of America, and Verizon Communications, and plan to submit it at a few more firms for the 2008 proxy season, said Jennifer O'Dell, assistant director of the Laborers' office of corporate affairs.
In the Toll Brothers proposal, the union pension fund writes that "our [c]ompany's CEO, Robert Toll … has been CEO of the [c]ompany since its inception in 1986. His long tenure indicates a need for a clear succession plan." According to the company's corporate governance guidelines, the board should be "sensitive" to succession planning issues, but the document does not spell out specific policies in case of a CEO's retirement or emergency departure.
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