Qualcomm Inc (QCOM)

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QCOM stockholders to reap greater dividends, vote to alter board elections
45 minutes ago


Stockholders wielded uncommon power at Qualcomm Inc.'s annual stockholders meeting Tuesday, learning they would collect even greater quarterly dividends and voting in favor of a stockholder proposal that could ultimately rewrite how Qualcomm's board is elected.

Qualcomm (Nasdaq: QCOM - news) announced that its quarterly cash dividend has been increased from 7 cents per share to 10 cents per share, a 43 percent improvement. The increase puts the annual dividend rate at 40 cents per share of common stock.


The new rate is effective for the quarterly dividend payable June 25, to stockholders of record as of May 28.


Also at the meeting, held at Copley Symphony Hall downtown, stockholders approved a proposal that Qualcomm's board had unanimously recommended against. Bernard Lubran of Rockville, Md., owner of 700 shares of Qualcomm common stock, recommended that the board take the steps necessary to elect its directors annually, rather than the staggered three-year system already in place.


This is the first time a stockholder proposal has ever been included on a Qualcomm proxy.


In his proposal, Lubran wrote, "The great majority of New York Stock Exchange (news - web sites) listed corporations elect all of their directors each year. In 2003, corporations such as Pfizer (NYSE: PFE - news) and Dow Jones (NYSE: DJ - news) proposed to shareholders the eliminated (sic) of the stagger system for election of their board of directors."


An annual system would ensure that directors be held accountable for the company's condition each year, and "to a certain extent prevents the self-perpetuation of the board," Lubran said.


In its proxy statement, Qualcomm defended its three-tiered board election system as necessary to maintaining an informed and experienced board. Under the current system, one-third of the 13-member board is up for re-election each year. Stockholders approved the election process in 1993.


"The stockholders' decision has worked well for the past 10 years, in that it balances the need to have new directors bring fresh ideas and perspectives to the company with the need for experience on the board," according to Qualcomm's proxy.


Qualcomm executives cautioned Tuesday that the proposal is advisory, and so doesn't in itself eliminate the classified board. Rather, because the board election process is a provision of Qualcomm's certificate of incorporation, a separate board-drafted proposal to amend the certificate would have to be approved by two-thirds of Qualcomm's shareholders.


Such a proposal wouldn't be made until next year's annual meeting, Qualcomm Chief Executive and Chairman Irwin Jacobs said.


"We did discuss the possibility that this would be approved at the board yesterday," Jacobs, who beneficially owns 22.3 million Qualcomm shares, told stockholders after the vote tally was announced. "And we will move forward, take the advice, and move forward to take the steps that would allow stockholders to vote at the next meeting, most likely, on the moving further forward to declassify the board. So we have received that input from stockholders and we'll respond to that. And I thank you very much for that help."


Lubran's proposal didn't inhibit the re-election of four Qualcomm board directors at Tuesday's meeting. Irwin Jacobs, Adelia Coffman, Raymond Dittamore and Richard Sulpizio are slated to serve until the 2007 annual meeting.


Stockholders also approved a proposal to amend Qualcomm's 2001 stock option plan by 32 million shares for the purpose of employee incentives, and to ratify PricewaterhouseCoopers LLP as Qualcomm's independent accountants.


Qualcomm only began offering quarterly dividends last year. At its 2003 annual stockholders meeting Qualcomm declared a quarterly dividend of 5 cents per share. An increase to 7 cents per share was announced in July 2003.

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