5. Loews
> 2-yr. stock change: +14%
> No. board seats: 13
> No. independent directors: 10
> Combined CEO/chairman?: No
> Board attendance rate: 75%
Three members of the Tisch family are on the Loews (NYSE: L) board of directors: President and CEO James Tisch, and co-chairmen Jonathan and Andrew Tisch. Together, those three directors own about 9.8% of the outstanding stock. However, they control 30% of the board’s seats. For their services, the Tischs are paid quite well. James has received nearly $28 million since 2009, while Jonathan and Andrew received more than $20 million each in that time.
The board does have a lead director, who is in charge of the independent directors. However,that director, Paul Fribourg, has a long affiliation with the company and the Tisch family, having served with them on the board since 1997.
6. Vornado Realty Trust
> 2-yr. stock change: +12%
> No. board seats: 11
> No. independent directors: 9
> Combined CEO/chairman?: No
> Board attendance rate: Not listed
Vornado (NYSE: VNO) has four non-independent directors on its board. In addition to current CEO Michael Fascitelli, former CEO Steven Roth serves as chairman of the realty trust. An interlaced set of relationships exists among the board and the company’s top management and founder. Three members of the board — Roth, Russell Wight and David Mandelbaum – are all partners of the real estate company Interstate Properties. Since 1992, Vornado has actively managed the operations of Interstate Properties. Together, the three men control more than a quarter of the board seats, but control only 12% of the common shares.
Meanwhile, all four of the aforementioned directors, along with Richard West, serve on the board of Alexander’s, where they, along with Interstate Properties and its general partners, own 60% of Alexander’s common stock combined.
7. Dollar Tree
> 2-yr. stock change: +150%
> No. board seats: 11
> No. independent directors: 8
> Combined CEO/chairman?: No
> Board attendance rate: 75%
Like Bed Bath & Beyond, discount retailer Dollar Tree (NASDAQ: DLTR) has a board loaded with inside directors. In addition to CEO Bob Sasser, co-founders Macon Brock and J. Douglas Perry have both served on the board since 1986, as has H. Ray Compton, who was a former executive vice president and chief financial officer. In addition, Thomas Saunders, a founder of Saunders Karp & Megrue Partners, L.L.C. and a former major investor of the company, serves on the board as well. Saunders and Brock each own about 1% of stock, yet hold a disproportionate share of the company’s board seats.
The board also has some interconnectedness. Both Conrad Hall and Lemuel Lewis previously served as executives and directors of Landmark Communications, where Brock has served on the board.
8. Progressive
> 2-yr. stock change: +1%
> No. board seats: 11
> No. independent directors: 10
> Combined CEO/chairman?: No
> Board attendance rate: 75%
Directors of auto insurance company Progressive (NYSE: PGR) tend to be busy individuals. Take director Bradley Shears, the former CEO of Reliant Pharmaceuticals. In addition to Progressive, he also serves on the boards of Covance, Henry Schein and Honeywell International. Six other directors serve on two other different for-profit boards.
Some of the board is interconnected as well. Lawton Fitt serves on the board of Ciena Corporation, where another director, Patrick Nettles, serves as executive chairman. Meanwhile, the company’s board is loaded with people who have been there a long time. Peter Lewis, the founder and current non-executive chairman, has served on the board since 1965. Stephen Hardis has served on the board since 1988, and Charles Davis has served on the board since 1996.
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9. Kohl’s
> 2-yr. stock change: +1%
> No. board seats: 12
> No. independent directors: 10
> Combined CEO/chairman?: Yes
> Board attendance rate: 75%
Kohl’s (NYSE: KSS) is another board loaded with insiders. In addition to chairman and CEO Kevin Mansell, former CEO William Kellogg and former COO John Herma both serve on the board of directors. Herma serves on key committees of the board, notably the audit and governance & nominating committee. In addition, Peter Sommerhauser isn’t truly an independent director because the law firm he is a partner with, Godfrey & Kahn S.C., provides legal counsel to the company. Many directors have become glued to their board seats as well — four of the 12 directors have been on the board more than 20 years.
This board, like many, is also very interconnected. Both Sommerhauser and Dale Jones serve as trustees for the Northwestern Mutual Life Insurance Company, where another board member, John E. Schlifske, serves as chairman and CEO. Meanwhile, Hampshire Trust owns 6% of Kohl’s shares, where Sommerhauser shares voting and investment power with three other people. In addition, directors Peter Boneparth and Frank Sica both serve on the board of JetBlue.
Douglas A. McIntyre, Sam Weigley, and Lisa Uible
