Business Digest


April 16, 2004

In the Region

Norway lawmakers threaten to pull out from fighter program

Norwegian lawmakers threatened yesterday to pull out of the U.S.-led development of a new jet fighter unless American companies make good on promises of defense contracts for Norway.

In June 2002, Norway joined the U.S.-led consortium of other NATO countries to develop the new $200 billion F-35 Joint Strike Fighter. In return for its $143 million contribution over 10 years, Norwegian defense companies were supposed to get contracts from the Pentagon and the aircraft's prime developer, Lockheed Martin Corp. of Bethesda.

Marit Nybakk, who chairs the Norwegian Parliament's defense committee, said yesterday that only negligible contracts have filtered down to Norwegian businesses, even though the contract was signed nearly two years ago. She gave the United States until June to make good on the deal.

Local insurance office wins award of excellence again

The Hunt Valley office of the insurance brokerage of Hilb, Rogal and Hobbs has received the company's annual Five Diamonds award of excellence for the third consecutive year in recognition of 2003 growth achievements.

The Hunt Valley office, with a staff of more than 100, is among four of nearly 65 offices worldwide to receive the award for three consecutive years. Hilb, Rogal and Hobbs, with headquarters in Richmond, Va., is ranked as the 10th largest insurance brokerage in the world.


AFL-CIO launches proxy campaign on executive pay

In a new campaign, the AFL-CIO is targeting directors who sit on compensation committees, holding them responsible for approving pay packages it considers particularly egregious.

Opening a new front in its annual executive pay campaign, the labor federation is going beyond naming names on its Web site. The union group also is launching a "vote no" proxy campaign against the pay panel members. The AFL-CIO's effort comes as activist investors are increasingly turning to withholding votes from directors to drive home concerns over corporate governance.

The companies on the union group's watch list include Citigroup Inc., Safeway Inc., Comcast Corp., AMR Corp., Cendant Corp., Cisco Systems Inc., Apple Computer Inc., Clear Channel Communications Inc., Dominion Resources Inc. and United Rentals Inc.

Sprint defends paying CEO $16.4 million in '03

Sprint Corp., fighting a shareholder proposal to oust a director, defended yesterday the board's decision to pay Chief Executive Officer Gary D. Forsee $16.4 million last year, saying it conformed with executive compensation at peer companies.

Forsee's pay "was rigorously reviewed" by board members, an independent compensation consultant and attorneys and took into account pay he forfeited when he left BellSouth Corp. to join Sprint in March 2003, the company said in a letter to shareholders.

Institutional Shareholder Services, a proxy adviser to 750 financial institutions, has called Forsee's pay "extravagant" and urged shareholders to withhold votes to re-elect Linda Koch Lorimer, a member of Sprint's nominating and audit committees. Sprint, the third-largest U.S. long-distance carrier, told investors yesterday to ignore that advice, saying Lorimer "led extensive corporate governance reforms at Sprint.

Appeals court delays ruling on phone rates

A federal appeals court has agreed to delay until June 15 a decision throwing out new rules designed to encourage competition for local telephone service.

The U.S. Court of Appeals for the District of Columbia Circuit acted in response to a request by the Federal Communications Commission. The regulatory agency asked for the time to give regional telephone companies and competitors a chance to negotiate an end to the legal dispute that has held up competition rules for eight years.

The FCC last month unanimously agreed to ask the court for the delay, a rare show of unity on the issue. The commission has split, 3-2, on rules for competition.

Delta Air CFO accepts post at struggling Mirant

Delta Air Lines' departing chief financial officer said she loves a challenge, and may get just that as she leaves the struggling carrier to take the same position at energy supplier Mirant Corp., which is undergoing bankruptcy reorganization.

Mirant said yesterday that M. Michele Burns' job as executive vice president and chief financial officer at the Atlanta company takes effect May 3. Burns, 46, will assume lead responsibility for the company's financial restructuring.

Magellan adds Chevron, Home Depot, Wal-Mart

The $66.9 billion Fidelity Magellan Fund, managed by Robert Stansky, added Home Depot Inc., Wal-Mart Stores Inc. and ChevronTexaco Corp. to its top 10 holdings last month.

Intel Corp., Fannie Mae and Johnson & Johnson were removed from Magellan's biggest holdings as of March 31, according to Fidelity Investments' Web site. The Boston fund's cash allocation declined to 1.2 percent.

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