General Electric shareholders rejected two major corporate-reform proposals at their annual meeting - but by relatively narrow margins. The measures called for shareholder review of the severance packages for senior executives - a response to the controversial perks given to recently retired chairman Jack Welch - and of so-called "poison pill" provisions to ward off hostile takeover attempts. They would, however, have been nonbinding. Despite the opposition of GE's board, each received about 48 percent of the vote. They were among 13 initiatives up for consideration. All were defeated.
Raytheon Corp. chief executive Daniel Burnham resigned, telling the company's annual meeting at Lexington, Mass., "It's time." In his five years at the helm, Burnham oversaw a major overhaul of the US's fourth-largest defense contractor. President William Swanson was named his successor. Raytheon builds Tomahawk cruise missiles, the Patriot antimissile system, electronics, and aircraft.
Toy retailer FAO Inc. emerged from bankruptcy, with a court certifying its reorganization plan Wednesday. Under the plan, FAO borrowed $77 million for operating costs and sold $30 million in convertible preferred stock to a group of investors that includes its chairman, Fred Kayne, and his brother. The company operates the FAO Schwarz, Zany Brainy, and Right Start chains.
In layoff news:
• Government officials in Michigan's Kalamazoo County were waiting for the other shoe to drop after being informed by pharmaceuticals giant Pfizer Inc. of impending job cuts that will apply to "all" of its facilities there. When it merged with Pharmacia Corp. April 16, Pfizer absorbed the latter's four plants in the county and their 6,300 employees. Pfizer is to announce on Tuesday how many of them will be let go. A local newspaper report suggested that a complete pullout could lead the city of Kalamazoo to consider filing for bankruptcy.
• Another 580 jobs will be cut as part of a cost-saving program by LSI Logic Corp., the Milpitas, Calif., chipmaker announced. The company laid off 1,400 workers in January 2002 and 500 in early 2001.