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AFL-CIO to Urge Peabody Energy Shareholders to Enact Governance Reforms at Annual Meeting

The AFL-CIO will urge Peabody Energy Corp. (NYSE: BTU - News) shareholders to adopt three corporate governance reforms at the company's annual shareholders meeting on Friday, May 6 at the Ritz-Carlton Hotel in Clayton, Missouri.

"The retirement security of America's working families depends in part on companies like Peabody Energy having good corporate governance," explained AFL-CIO Secretary-Treasurer Richard Trumka. "As Peabody Energy shareholders, through their retirement savings, working families deserve a more accountable company."

The AFL-CIO has proposed a shareholder resolution to "declassify" the board of directors. Peabody Energy's current framework divides the board into three classes, with approximately one-third of all directors elected annually to three-year terms. The labor federation's resolution points out that by limiting shareholders' ability to vote annually on each director, stockholders are prevented from registering their views on the performance of the board collectively and on each director individually.

The lack of accountability of the current three-year terms was highlighted by the recent appointment of Peabody Energy executive Gregory Boyce to the board of directors and as Chairman of the board's Executive Committee. Mr. Boyce is slated to become company CEO next year. Shareholders will not have an opportunity to approve Boyce's position on the Board until the 2006 Annual General Meeting, a full 15 months after he assumes his responsibilities on the Board.

"Director elections are the primary avenue for shareholders to hold management accountable and influence crucial corporate governance polices," said Trumka. "Peabody Energy's current framework for election of directors needs to be changed."

The AFL-CIO is also supporting two additional reforms. A proposal sponsored by the Amalgamated Bank LongView MidCap 400 Index Fund urges the Board to adopt a policy that independent directors constitute two-thirds of the Board. Another proposal sponsored by the Sheet Metal Workers' National Pension Fund urges the Board to take the necessary steps to require that directors be elected by the affirmative vote of a majority of votes cast at an annual meeting of shareholders.

"These proposals will heighten director responsiveness to shareholder concerns, enhance our company's corporate governance, increase management accountability to shareholders and contribute to long-term shareholder performance," said Trumka.

Source: AFL-CIO


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