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| THOMPSON:
NYC PENSION BOARDS SUPPORT ELECTION OF NEW BOARD FOR EL PASO CORPORATION
IN RESPONSE TO FAILED LEADERSHIP
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| New York City
Comptroller William C. Thompson Jr., on behalf of the boards of trustees
of the New York City Employees' Retirement System (NYCERS), the New
York City Teachers' Retirement System (TRS), the New York City Fire
Department Pension Fund and the New York City Police Pension Fund,
announced their support of the dissident shareholder proposal to reduce
the board size from 12 to 9 members, and the election of eight of
nine dissident nominees in the contested board election at El Paso
Corporation. The proposal comes in response to the failed leadership
of the board that led to the company’s sub-par performance over
a 5-year period and the costly settlement of numerous lawsuits.
“As a fiduciary of the New York City Pension Funds, I cannot continue to support an El Paso board which has consistently demonstrated its inability to responsibly manage the company,” said Comptroller Thompson. “The facts are clear. El Paso’s share price fell by over 90 percent between April 1, 2002 and February 18, 2003, but its board still saw fit to provide former Chairman & CEO William A. Wise with a $9.4 million severance package. That is incomprehensible.” The Comptroller also noted that “Decisions made by El Paso’s board to support the illegal manipulation of California’s natural gas market resulted in the company being forced to settle suits with private and public claimants to the tune of $1.7 billion in cash, stock and discounted natural gas. This would be an egregious act at any time, but was even more so because California was going through a particularly difficult energy crisis at the time. We must end the reckless reign of the current board in order to protect the interest of the shareholders.” The funds are supporting the proposal initiated by two dissident shareholders, Salim K. Zilkha and Oscar S. Wyatt (the “dissidents”), who own 8.9 million shares and 4.3 million shares, respectively. The dissents have proposed cutting the El Paso board of directors from 12 to nine members and have provided a slate of nominees. With one exception, the funds believe the proposed board is well balanced and possesses the necessary industry experience to minimize disruption in the event of a board charge. The funds believe that Mr. Zilkha, who was a director of the company from October 1999 to January 2001, and an advisory director from January 2001 to June 2002, should not be included in the slate of nominees. The five City pension funds own approximately $18 million worth of El Paso Corporation shares. El Paso Corporation is an energy company based in Houston, Texas. It provides natural gas transportation, gathering, processing and storage. It also conducts natural gas and oil exploration, energy related commodities and product marketing, as well as power generation and energy infrastructure facility development and operation. ### |
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