LRO Member
Ed Prescott Shares His View On
Lucent's Annual Shareholders
Meeting.
I made the
trek to Wilmington today
[2/15/06] to attend subject
[Lucent shareholders] meeting
and the follow-up meeting of the
LRO Board. Two of the
shareholder proposals [from LRO
members] received a majority of
the votes. Both of these
shareholder proposals received
the strong endorsement of the
LRO. It will be interesting to
see just what Lucent does with
this turn of events. I came away
from the days events with the
following two main thoughts:
1. There are still significant
questions about the real status
of the pension and healthcare
trust funds. While we all got a
recent letter from Ms. Russo
reassuring us that everything
was OK, I don't think she is
giving us the whole story. LRO
members have been doing
extensive digging through all
the footnotes and SEC filings
and have found enough
questionable things to make me
nervous. For example, Russo
states that under the currently
effective ERISA rules, the funds
are fully funded. But LRO
research has turned up a
separate report to the SEC that
admits a $1.2 billion
underfunding of the management
pension plan if FASB rules are
followed. There is a pension
reform move afoot in Congress
that could wind up forcing
companies to adopt the more
stringent FASB accounting rules
among other things. Also, use of
pension fund credits to hype
earnings would no longer be
allowed. If these events happen,
Lucent could be in big trouble
because the resulting pension
fund underfunding will have to
be made up from operating
income!
2. The LRO is doing yeoman work
in researching Lucent's
financial statements, reports
and filings. But much more help
is needed. This help can take
the form of letters, e-mails and
phone calls to our Senators and
Congressman. These
communications should address
the subjects of interest to us
and request the legislators
assistance in correcting the
abuses that we have been
subjected to. Equally important
is your membership in the LRO. I
am impressed with the efforts
these volunteers have put forth.
But there are expenses that have
to be incurred. Mailings are
expensive. Legal help on some
issues is required. All these
things cost money and LRO dues
is the only source of revenue.
$25/yr. is not a large sum
especially when you consider the
results of the shareholder
proposals at today's meeting.
JOIN NOW!
Ed Prescott
Zionsville,
PA
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