Webster, People's Financial Hold Shareholder Votes to Declassify Boards

Two New England banking companies are getting closer to requiring their directors to stand for election yearly.

The companies — Webster Financial (WBS) and People's United Financial (PBCT) — will both hold shareholder votes at their upcoming annual meetings on proposals to declassify their boards. Most companies have historically had staggered boards in which directors stand for election every three years, but shareholders at many publicly traded firms have been pushing in recent years to declassify their boards in an effort to hold directors more accountable.

Of the two, Webster is farther along in the process. Directors of the $19.1 billion-asset company have recommended shareholders vote for a binding proposal to declassify the board. Shareholders last year approved a nonbinding declassification proposal.

Requiring directors to stand for election each year "provides shareholders the opportunity to express their views on the performance of the entire board each year," Webster's board said in the company's proxy statement. Webster, based in Waterbury, Conn., holds its annual meeting on April 26.

People's United shareholders will vote on a nonbinding declassification proposal at the Bridgeport, Conn. company's annual meeting Thursday. The $27.6 billion-asset company's board is not making a recommendation on the proposal and provided three reasons in its proxy statement for both voting against it and for it.

The declassification proposal was submitted on behalf of the North Carolina Retirement System, who said it was advised on the matter by the Harvard Law School Shareholder Rights Project.