Burd Challenged on Chairman and CEO Roles

Mar 25, 2004
George Anderson

By George Anderson

In a scene not unlike that recently played out at Disney with Michael Eisner, investors at Safeway are asking if the company would be better off stripping chairman and chief
executive officer, Steve Burd, of one of his titles.

Bill Atwood, executive director of the Illinois Board of Investment certainly provided the Chicago Tribune with an assessment of Safeway’s stock performance under Mr.
Burd’s leadership. “Safeway’s share price movement has been disastrous,” he said. “It’s been one of the worst performers over the past five years.”

Mr. Atwood’s group, along with the California Public Employees’ Retirement System and New York State Comptroller Alan Hevesi, are scheduled to hold a news conference in Washington,
D.C. today, to announce their intention to hold up Mr. Burd’s re-election to the Safeway Board of Directors at the chain’s upcoming annual shareholders’ meeting in May.

Safeway spokesperson, Brian Dowling, said the actions being announced have “everything to do with an ongoing union personal campaign against Mr. Burd, and nothing to do with
legitimate corporate governance issues or his performance as CEO.”

Moderator’s Comment: Is it wise, in general, for one person to hold the chairman and chief executive positions of
a company? What about in the specific instance of Safeway and Steve Burd?

Current wisdom seems to say companies are better served by separating the titles, although we haven’t seen anything to quantify the benefit of one approach
versus the other.

Brian Dowling is right that the move against Steve Burd is about the United Food and Commercial Workers’ (UFCW) vendetta against the person they believe
tried to break up the union.

But, even with that, Mr. Burd is the same person who told attendees at yesterday’s Merrill Lynch Retailing Leaders conference that employee morale at the
company’s stores in California was “excellent.” It’s hard for us to support someone who is so clearly out-of-touch with the people he is supposed to be leading.

Anderson – Moderator

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