local 50 Confronts Excessive Executive Pay

Shareholder Coalition Promotes Executive Pay Reform at Dominion Resources
Wednesday April 7, 2:47 pm ET


WASHINGTON, April 7 /PRNewswire/ -- A shareholder coalition including the Utility Workers Union of America (UWUA) and International Brotherhood of Electrical Workers (IBEW) Local 50 announced today a campaign to promote an executive compensation reform proposal at the annual meeting of Dominion Resources, scheduled for April 23, 2004 in Cleveland. Details about the reform proposal are available at www.ReformDominionNow.org.

The proposal -- a bylaws amendment requiring shareholder approval before Dominion could pay executives more than the IRS deductibility limits -- comes on the heels of management's disclosure that it boosted top executives' pay dramatically in 2003 despite declining corporate performance. The total compensation package for Dominion CEO Thomas Capps, for example, jumped 160% to more than $7.2 million, even though the Company's net income fell by nearly 80% during the year.

"The outrageous compensation that Dominion has lavished on top executives destroys any notion that executive pay at this Company is linked to corporate performance," observed UWUA Vice President Jerry Waters. "This year Dominion shareholders have an opportunity to rein in runaway executive compensation by voting for our reform proposal."

The Internal Revenue Code generally permits companies to deduct no more than $1 million of an executive's annual compensation, not including "performance-based" pay such as incentive bonuses or stock options. The shareholder proposal, however, would also require Dominion to disclose the specific performance goals for such plans.

At Dominion, for example, management's proxy discloses only that 2003 annual incentive bonuses for top executives were based on broad criteria such as "operating earnings" or "operating and stewardship goals." The Company's directors approved a 100% payout of Capps' $1.4 million bonus for 2003, even though income before taxes declined by 24%, and net income fell even more sharply to $1.00 per share from $4.85 the previous year.

"Unless management is required to disclose the specific goals for these so-called 'performance' compensation schemes, it is impossible for shareholders to determine if these plans genuinely measure executive performance," stated Jack Wells, President of IBEW Local 50.

Dominion was required to submit the resolution to shareholders after the SEC Division of Corporation Finance rejected management's bid to omit it from the Company's proxy statement. Members of the Reform Dominion Now Coalition are urging shareholders to vote for the proposal on item 3 of management's proxy, and make no proxy solicitation of their own.

The Coalition includes the Utility Workers Union of America, which represents approximately 2,700 Dominion employees in Ohio, New York, Pennsylvania, and West Virginia, and IBEW Local 50, which represents 3,000 Dominion employees in Virginia. Many UWUA and IBEW Local 50 members at the Company are also Dominion shareholders.




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