Legg Mason believes it knows best.
Despite a vote from its shareholders late last week to split Raymond “Chip” Mason?s dual role as chairman and chief executive officer, the Baltimore-based $969 billion asset manager said he thinks that for now, the responsibilities are best left combined.
“In response to the stockholder proposal, the board has recommended a vote against the proposal,” said Nick St. George, Legg Mason?s lead independent director, at the meeting. “The board believes that the proposal would unnecessarily restrict its flexibility in corporate governance matters.”
The board understands the importance of strong corporate governance and thinks expanding the authority and role of the lead independent directors is a key element in the company?s program, St. George said.
Some industry analysts disagreed.
“The positions should be apart, and that holds not just for Legg Mason but any company that we cover,” said Jeffrey Ptak, an analyst with Morningstar. “The board is part of the system of checks and balances that operates at a company and is charged with oversight, and we feel that the board can do that in themost unfettered way when you separate those two functions.”
During the meeting, the company also announced a quarterly cash dividend for shareholders. The dividend was valued at 24 cents per share.
Also, Legg discussed changes that would save about $140 million annually, in addition to the replacement or retirement of more than 500 systems and the relocation of 14 of 16 international offices. Legg has investment centers in 10 countries, including the United States.
Yearly awards, including being one of Fortune magazine?s most admired companies for the fourth consecutive year, also were presented at the meeting.
However, the main topic of discussion was the vote to split Mason?s titles.
“Generally speaking, shareholders have gotten high-quality stewardship from Mr. Mason ? and this situation is in the spirit of continuous improvement ? but obviously Chip will be a hard act to follow if they split the roles apart,” Ptak said.
Legg Mason is part of The Examiner Top 10, a portfolio of some of the largest publicly traded companies in the region.
