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13
May 2002, NEWS ADVISORY
__________________________________________________
POTLATCH: Etxtravagant dividends bleed company of
assets
Investor
calls for report, including Weyerhaeuser family's
role
John
Osborn [RR&CC
/ Sierra
Club]
josbornmd@yahoo.com 509.939-1290
Bart Naylor [Green
CAP]
bartnaylor@aol.com 703.786-7286
SPOKANE__On
Wednesday, May 15, investors of Potlatch Corp. will decide
whether to prepare a report on the company's dividend
policy. Paying high dividends at a time of historic
losses is at the center of the debate over Weyerhaeuser
family influence at Potlatch, one of the Inland Northwest's
most powerful and influential corporations.
"The
resolution seeks a thorough analysis of dividend policy,
past and future," said John Osborn, a conservationist and
Potlatch investor who is proposing the resolution.
"Management has been paying out high dividends even while
the company has been suffering some of the worst losses in
its 100-year history, closing plants, and taking out new
loans."
This
proposal for the dividend report is unanimously opposed by
the Board of Directors, that also includes members of the
Weyerhaeuser family. The dividend report, if approved by
investors, would address the substantial ownership of
Potlatch shares by members of the extended Weyerhaeuser
family.
The
Weyerhaeuser family has been prominent in the timber
industry for nearly 150 years. Frederick Weyerhaeuser
started Potlatch in 1903 at the Idaho town that still bears
the company's name. The company is now based in
Spokane and has holdings in the Northwest, Minnesota, and
Arkansas.
"Most
great companies begin with families," said Bart Naylor,
director of Green CAP. "But when they access the
capital markets, family ties are supposed to be
subordinated. Corporations funded by public investor monies
should be operated for public investors, not family
interest." Naylor formerly served as the Chief
Investigative Officer to the Senate Banking Committee during
the S&L Crisis, and investigated Keating
S&L.
"Violence
to the balance sheet&emdash;these extravagant dividend
payments--may be one reason that some Potlatch analysts
advise investors to sell this stock, a highly unusual
recommendation in today's world of inflated investment
opinions," added Naylor.
Potlatch
is at the center of controversies, including air and water
pollution at its Lewiston mill and efforts to save wild
salmon runs in the Northwest. Potlatch is a major user
of water transportation on the Snake River made possible by
four dams, and has been the leading corporate opponent to
bypassing those dams to save the salmon from
extinction.
"The
benefit of reduced transportation costs and dilution of
outflow from its Lewiston plant are minor even to Potlatch,"
noted Osborn. "While Potlatch's economic future is
drained to pay ill-afforded dividends--a sizeable portion of
which go to a relatively few Weyerhaeuser family
members--the Northwest watches the agonizing extinction of
this symbolic emblem of America's Northwest."
Osborn
is a Spokane physician and conservation chair of the Sierra
Club's Northern Rockies Chapter and founder of The Lands
Council. He is one of authors of a book, "Railroads
& Clearcuts" that looks at the links between the
building of the West's railroads and the rise of Northwest
timber companies including Potlatch. He has been an
investor with Potlatch since 1999. His previous
resolution to reform director elections at Potlatch failed
in 2000, although the same resolution won overwhelming at
Boise Cascade in 2000 and again this year: 38 million
to 9 million. Green CAP is a corporate accountability
project of the Railroads & Clearcuts Campaign, for which
Osborn serves as president.
The
annual shareholders meeting will be held at Hotel Lusso (the
Etruscan Room) starting at 8 a.m. on Wednesday, May
15.
___________________________________________
SCHEDULING & PROXY INFORMATION
POTLATCH
Where:
Hotel Lusso, North One Post Street, Spokane, Washington
When: 8 a.m., Wednesday May 15, 2002
Potlatch
Proxy Statement to Shareholders
Potlatch
Shareholder Resolution: Dividends / Weyerhaeuser
Family (page 20)
RESOLVED:
That Shareholders urge the board to prepare a report that
explains past and current dividend policy, and alternative
plans for future dividends. This report should address the
substantial ownership of Potlatch shares by members of the
extended Weyerhaeuser family.
ADDITIONAL
RESOURCES AND INFORMATION:
Change
Corporate America for 33 Cents: A self-help guide to
Shareholder Activism
(Appendix
3 contains cross-links)
Railroads
& Clearcuts Campaign
A
Photographic Essay: Legacy of Congress's 1864 Northern
Pacific Railroad Land Grant
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