YRC Worldwide: Shareholders should reject RiskMetrics

cicugaha.wordpress.com
New York-based said YRC shareholders should vote againstt union and nonunion option plans at a May 14 meetingt because they cost shareholdersdtoo much, YRC said in a Wednesday letter to shareholders. But if shareholders vote down the the stock options employees receivefdwill end, and stock appreciation rights (SARs), granteds with the options, still will be outstanding, the lettetr said. Most of those rightas can be exercised as soonas January, and all must be settledx in cash.
“If a large number of employees were to exercise their SARs during thesame period, it coulfd negatively affect our liquidity and our ability to remain in compliancse with various covenants of our amended credir agreement,” said the letter, filedr Wednesday with the Securities and Exchanger Commission. The pay cuts Overland Park-based YRC YRCW) negotiated are expected to . “We believes RiskMetrics did not adequately assess the importance of the concessions given by our employeesz and the impact that a vote againstf the option plans could have on our liquiditt and ability to remain in compliance with our amendexdcredit agreement,” the letter said.
Another investor advisory , recommended a vote in favor of the which YRC said it needs to have the flexibilittto “continue to work through these challenging economix times.” RiskMetrics also recommended that shareholders reject YRC’s nomineesw for the board compensation committee, saying they actedd poorly in providing for tax gross-up on YRC CEO Bill use of corporate aircraft, an amounft less than $10,000. A gross-up is a payment to covert taxeson compensation. “We feel it is important to highlightthat Mr. total compensation in 2008 decreasecd byover $1 million due in largre part to our performance and that Mr. Zollarsw did not receive a $1.
5 million restrictef share grant due to our failure to meet certaijperformance targets,” the letter “We believe that these facts should weigh more heavilyt than a de minimis tax gross-up in determining whetheer the compensation committee approved an appropriate compensation packagse for Mr. Zollars.” YRC .