Administration September 2, 2001

Investors Criticize AT&T Breakup

February 9, 2001 (PLANSPONSOR.com) - More than 150 major institutional investors and shareholders of AT&T, including public and Taft-Hartley pension funds, joined in a conference call to discuss potential problems surrounding the breakup of AT&T.
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The call, sponsored by the Communications Workers of America (CWA) and an AFL-CIO program, addressed issues such as creating long-term shareholder value and rejecting the corporate restructuring plan.
 
The CWA and AFL-CIO are urging shareholders to reject AT&T’s “ill-conceived” restructuring plan at the May 23 annual meeting and at the special shareholder meeting later this summer.  The plan calls for establishing broadband and consumer tracking stocks.

The labor groups also said shareholders should demand that the AT&T board of directors step up involvement in company operations and refocus attention on operations integration and long-term strategy “to create and reinforce shareholder value.” The CWA and AFL-CIO also are seeking support for a shareholder proposal calling for separation of the chairman and chief executive officer position.

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Called Diversion

Participants on the call, representing banks, public employee retirement funds, asset managers, analysts and joint union-management pension funds, together hold 20% of the outstanding shares of AT&T stock, or 680 million shares.

Michael Garland of the AFL-CIO Office of Investment, outlined labor’s position on the proposed breakup and the implications for long-term shareholder value. Garland called the proposed breakup of AT&T into four separate companies – consumer, business, wireless and broadband – “a costly, two-year diversion from the real problems AT&T confronts, one that will destroy shareholder value.’

“AT&T should be using its competitive advantage and unique strengths to create value,’ Garland said. Those “unique strengths” include a diversified portfolio of telecom services, a huge consumer and business customer base, a leading reputation for quality and reliability, an experienced workforce and a dominant brand name, he said.

AT&T’s initial bundling strategy was designed to capitalize on these advantages. A January 2000 showed that 66% of business customers and 63% of residential customers want bundled services, Garland noted. Further, leading telecom competitors provide such bundled services, but AT&T has been unable to implement bundling, failing to integrate sales and services and other systems, he said.

– Chuck Epstein        editors@plansponsor.com

Benefits August 31, 2001

Americans Like Limits on Patients' Rights

August 31, 2001 (PLANSPONSOR.com) - While Americans favor a patients' bill of rights, that support doesn't necessarily include an unlimited right to sue, according to a new survey.
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The survey, released earlier this week by the Kaiser Family Foundation and the Harvard School of Public Health, found that public support for a patients’ bill of rights increases noticeably when there are limits on the lawsuits. In fact, the study found that 80% of respondents prefer a patients’ bill of rights with some limits, to just 16% that favored a no limit alternative.

But the real issue on people’s minds seems to be affordability, cited as the top health care concern by 30% of survey respondents. Affordability of drugs for seniors was cited by 15%, while:

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  • 13% noted keeping Medicare financially secure
  • 13% wanted to expand health care coverage
  • 13% thought helping families with long term health care costs for elderly or disabled family members was most critical.

Only 7% thought that “protecting patients’ rights in HMOs and managed health care plans’ was a top priority.

Roughly 60% expect health insurance premiums to rise if a patients’ bill of rights were enacted, while a third say they will go up “a lot.” Nearly half (42%) think employers would be more likely to stop offering health insurance for their workers, but a slightly larger 46% don’t expect it to have an impact on availability.

 

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