BellSouth details outside business ties by its directors

Published 9:43 am Thursday, March 2, 2006

ATLANTA — Three BellSouth Corp. directors have ties to businesses or their subsidiaries to which the telecommunications giant paid more than $1.3 million in fees last year, a regulatory filing issued Wednesday says.

The details were contained in the Atlanta-based company’s proxy statement to shareholders that precedes its annual meeting, scheduled for April 24.

Such related party transactions are common at big corporations, but some corporate governance experts have questioned whether directors of a corporation should have ties to other companies with which the corporation does business.

BellSouth, the dominant local telephone provider in nine Southeastern states, said in the proxy that the board has determined that none of the outside relationships held by directors Reuben Anderson, James Blanchard and Armando Codina prevent them from being independent.

Anderson is a partner in Phelps Dunbar, a Jackson, Miss., law firm. Last year, two subsidiaries of BellSouth retained the law firm on certain legal matters and paid the firm $178,000 for it services, the proxy says.

Blanchard is chairman of the board of Synovus Financial Corp. BellSouth said it paid $343,000 last year to Creative Financial Group Ltd., a Synovus subsidiary, for financial planning services for its employees.

As for Codina, BellSouth’s lead director, he is chairman of the board and chief executive officer of Codina Group Inc. The proxy says that last year, BellSouth’s real estate subsidiary, Sunlink Corp., paid a Codina subsidiary an $812,000 broker fee to handle the sale of a BellSouth property.

Anderson received $73,200 in total cash compensation from BellSouth last year, Blanchard received $68,200 and Codina received $69,600, the proxy says.

The proxy also outlined total compensation for top BellSouth executives in 2005.

CEO Duane Ackerman received roughly $12.5 million in total compensation last year, including salary, bonus, restricted stock awards and payouts under a long-term incentive program, the proxy says.

Ackerman faces mandatory retirement no later than May 2007, and BellSouth officials have been discussing a succession plan, the proxy says. It doesn’t say when he will retire or who might be his replacement.

Separately, the proxy says that a shareholder proposal to be presented at next month’s annual meeting asks shareholders to approve a plan requiring BellSouth to provide a report, updated semiannually, disclosing the company’s monetary and non-monetary contributions to political candidates, political parties and political committees.

The board of directors is asking shareholders to reject the proposal, which has been made by shareholders before.