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UPDATE 1-Reuters Summit-Holders pump up for annual meetings

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By Brendan Intindola

NEW YORK, Feb 18 (Reuters) - The curtain rises this week on the annual shareholder meeting season, the four-month-long series of productions in which corporate directors meet face to face with the people who own their companies.

While the tone has been more tragic than comic over the past three years, the 11-month-old U.S. stock-market recovery has eased the atmosphere of gloom that hung over recent years' meetings following the collapses of Enron and WorldCom.

Still, investors are gearing up to deliver proxy resolutions and to target specific directors -- moves they believe will prevent future corporate meltdowns.

The oncoming rush of interaction between corporations and their shareholders unofficially kicked off on Wednesday with Lucent Technologies Inc.'s annual meeting this morning in Wilmington, Delaware, the first big event of 2004.

Also on Wednesday, Reuters hosts the Reuters Corporate Reform Summit, a daylong series of discussions in New York with influential leaders in the areas of corporate reform, governance and activist investing.

Reuters correspondents will discuss and report on critical issues for shareholders, companies and regulators. Among the scheduled participants at the event are Harvey Pitt, former chairman of the U.S. Securities and Exchange Commission; billionaire corporate raider Carl Icahn; and Ira Millstein, senior partner at the law firm Weil Gotshal & Manges and governance counsel to General Motors Corp. , Walt Disney Co. and Tyco International Ltd.

Others scheduled to speak include North Carolina State Treasurer Richard Moore, a member of the New York Stock Exchange board of executives; Herbert Denton of Providence Capital; and class-action attorney Melvyn Weiss.

SCANDAL PREVENTION

In the coming weeks, shareholder activists will argue in auditoriums and conference rooms around the United States that to prevent future scandals, executive compensation needs to be reined in and options must be pegged to specific performance measures, among other resolutions.

For example, Catholic Funds Chairman Dan Steininger plans to submit resolutions requiring Alcoa Inc. , J.P. Morgan Chase & Co. Inc. and Cendant Corp. to seek shareholder approval if a chief executive is paid more than 100 times the salary of the average worker.

"It's the average employee who puts the quality in the product," Steininger told the Reuters Corporate Reform Summit.

And they are no longer content with just presenting these persistent issues in proxy statements and at microphones in theater aisles.

The activists are pressing, with support from the U.S. Securities and Exchange Commission, for more influence in who gets a seat at the directors' table.

An anticipated rule change that would allow shareholders in certain cases to nominate directors is facing fierce opposition from corporate chiefs.

Foremost among the trends this spring will be an increase in scrutiny of individual directors' work and campaigns to withhold votes from those considered unworthy.

"Director accountability has really taken front stage," said Bill Patterson, director of the AFL-CIO office of investments, which helps manage $400 billion in union-sponsored funds.

"We are asking directors to describe completely what they do on the board to elevate shareholder interest and maximize long-term shareholder value," said Patterson, who is also a panelist at Wednesday's Reuters Corporate Reform Summit.

With the SEC considering wider access to the board nominating process, and with 2003's annual meeting season bringing record levels of investor support for shareholder resolutions, he said, "we will be focusing on the roles individual directors play in overseeing companies on behalf of shareholders."

(News from the Reuters Corporate Governance Summit will be delivered throughout the day on Wednesday to Reuters terminals and to the Reuters.com Web site, http://www.reuters.com)