Edison Shareholders Celebrate Better Margins

By Published On: May 22, 2004

While pressing for a $251 million-a-year general rate base increase for Southern California Edison, parent company Edison International and its shareholders celebrated increased profitability and the first dividend checks since the energy crisis. Hailing Edison International and utility chair John Bryson as the ?dividend man,? shareholders?many of them company retirees?came to the microphones to call for increased distributions in the year ahead. The International Brotherhood of Electrical Workers called for Edison to restore retiree health benefits, after the company cut them to contain rising costs. Bryson?whose 2003 performance-based compensation rose from $3.9 million to $6.6 million, plus 330,000 shares of stock options?pledged to work toward increased dividends. At the same time, he defended requiring retirees to increase their health plan contributions to contain the company?s $2.1 billion retirement benefit plan liability. ?Our company is doing well and future prospects look favorable,? Bryson told a small group of a few hundred shareholders attending the meeting in Long Beach. In the year ahead, Edison will seek to increase earnings growth and make new investments, particularly by expanding and replacing its aging transmission facilities. Bryson said Edison also will seek federal and state approval of new transmission facilities to take advantage of excess generating capacity in Arizona. Edison?s Mission Energy subsidiary plans to raise cash to retire debt by selling 14 generating stations in 10 nations overseas. Meanwhile, it will seek to negotiate long-term sales agreements for the 7,500 MW of coal-fired generation stations it owns in the Midwest that have been offering power on the merchant market. Contracts will make the unit?s cash flow more predictable, Bryson said. For the second year in a row, stockholders turned down a proposal by maverick shareholder John Chevedden to require their approval of poison pills, in which companies issue new stock to dilute share value in order to fend off hostile takeover bids. Bryson said that after the shareholders? meeting last year, the board has moved to implement a nonbinding shareholder resolution to submit any such action to shareholders for approval, as long as such a vote is considered to be in the best interest of stock owners. Chevedden criticized Bryson?s compensation increase and raised concerns about the company?s board members. They have gotten too cozy with management and are distracted by service on numerous other corporate boards, he warned. Chevedden also questioned the independence of the board members, including attorney Ronald Olson, whose law firm Munger, Tolles, and Olsen, he said, billed Edison for $6 million in legal services in 2002. Bryson said compensation to Edison executives?including himself?is ?below the industry median.? He also defended the board?s independence, saying that serving on other boards has provided Edison directors with valuable experience and knowledge. Shareholders elected astrophysicist France A. Cordova to the boards of both Edison International and the utility. She serves as chancellor of the University of California at Riverside and formerly was chief scientist at the National Aeronautics and Space Administration.

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