Hershey breaks policy in naming director, 75
LeRoy S. Zimmerman, a 75-year-old former Pennsylvania state attorney general, was nominated to a third term as a director of the Hershey Co., even though the firm's governance guidelines state that directors will not be nominated for reelection after their 72d birthdays.
Zimmerman was one of eight people nominated to the Hershey board for a one-year term, according to the corporate proxy statement released yesterday. The slate of directors includes one new name: Pamela M. Arway, a retired top executive at American Express Co. Inc.
Hershey Co. spokesman Kirk Saville referred questions about Zimmerman to the proxy statement, which says that "the board elected to waive" the age requirement for Zimmerman "at the 2010 annual meeting for an additional one-year term."
Charles Elson, chair of the John L. Weinberg Center for Corporate Governance at the University of Delaware, said it was unusual for a director to stay past retirement age. But, he said, it could happen under special circumstances, such as if the company were in the middle of an investigation or merger, or the person had special expertise.
As recently as January, Hershey considered buying the British chocolate company Cadbury P.L.C. in a multibillion-dollar deal. It was outbid by Kraft Foods Inc.
"If you are going to run afoul of a policy, it should be for a good reason, and it does not happen very often, and it usually does not last more than a year," Elson said.
Zimmerman, a two-term Republican attorney general in the 1980s, is chairman of the Hershey Trust Co., which controls a philanthropy with $7 billion in assets, among them, 80 percent of the voting control in the Hershey candy company.
The sprawling trust owns for-profit companies that finance its charitable mission - operating an 1,800-student residential school for poor children established by Milton S. Hershey in 1910. The biggest source of funds for the school is Hershey Co. stock dividends.
James Nevels and Tom Ridge, other prominent Pennsylvania Republicans, also were nominated to one-year board terms, the proxy says.
Nevels, Ridge, and Zimmerman comprise the three-member governance committee that evaluates people to serve on the Hershey Co. board, according to procedures detailed on the Hershey investor Web site.
Nevels is a former chairman of the Philadelphia School Reform Commission and is nonexecutive chairman of the Hershey Co. In 2009, he earned $296,445 in compensation from the post.
Former Pennsylvania Gov. Ridge earned $205,000 as a director of the Hershey Co. in 2009. Zimmerman also earned $205,000.
The growing political influence on the Hershey Co. board stems from the attempted sale in 2002 of Hershey, one of the largest employers in central Pennsylvania, to Wm. Wrigley Jr. Co. Attorney General Mike Fisher, then running for governor on the Republican ticket, blocked the attempted sale through his regulatory powers over charitable trusts.
Contact staff writer Bob Fernandez at 215-854-5897 or email@example.com.