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Tech Industry

Unisys investors reject spin-off

The company's shareholders vote against spinning off its hardware operation.

Unisys (UIS) shareholders voted against a proposal to sell or spin off the company's computer hardware operation at its annual meeting in Philadelphia yesterday.

It was the second consecutive year that the New York-based investment company Greenway Partners proposed and shareholders rejected the idea of axing the hardware division, the company said. Nearly 60 percent of shareholders rejected the idea, while 37 percent voted for the proposal.

Greenway wanted the company to focus on the its high-margin computer support and services businesses. Unisys management maintained that all three units are key to the company's turnaround efforts. The company is organized into computer hardware and technology, systems integration and consulting, and support services divisions.

Greenway, however, won shareholder support for a proposal to eliminate staggered terms for its directors, which would give shareholders the right to replace the entire board at the same time. Despite opposition by Unisys, 61 percent of shareholders voted in favor of the proposal, prompting Unisys chairman and CEO James Unruh to pledge serious consideration of the idea.

All four of the directors who were up for reelection were voted back with about 79 percent of the vote, while 21 percent supported a Greenway proposal to withhold votes from the directors to protest the company's stock performance.

Institutional Shareholder Services backed the proposals to withhold votes from directors and eliminate their staggered terms. But the company, which specializes in advising investment funds on proxy issues, opposed the spin-off idea.