Independent Proxy Voting Advisors Recommend Shareholders of The Salomon Brothers Fund Vote For the New Management Agreement
October 12 2005 - 12:48PM
Business Wire
The Salomon Brothers Fund Inc. (NYSE: SBF) today announced that
both Institutional Shareholder Services (ISS) and Glass, Lewis
& Co. (Glass Lewis), the nation's leading independent proxy
voting advisory firms, are recommending that shareholders vote in
favor of a new management agreement with Salomon Brothers Asset
Management Inc. (SBAM), to take effect upon the completion of Legg
Mason's purchase of Citigroup's asset management business. ISS's
voting analyses and recommendations are relied upon by more than
1,500 major institutional investment funds, mutual funds, and
fiduciaries and Glass Lewis's voting analyses and recommendations
are relied upon by clients that collectively manage more than $8
trillion. ISS and Glass Lewis made their recommendations after
considering the effort and arguments of Elliott Associates, L.P.
and Elliott International, L.P. ("Elliott"), two related hedge
funds, to solicit votes against approval of the management
agreement. In its report, ISS noted that: "SBAM has performed well
as investment advisor, leading to strong returns for shareholders
over the years. The board is also carefully monitoring any
discount, but it will not seek the discount's elimination at the
expense of long-term shareholders. A vote against this proposal may
create significant uncertainty for the fund and its shareholders.
ISS does not believe that this is the proper means to narrow the
discount." The ISS report continued, "Furthermore, the fund's
closed-end structure is a fundamental component of the fund's
investment objective and is critical to its successful
implementation. In conclusion, ISS believes that long-term
investors, presumably the majority of shareholders, can still
benefit from this fund's overall performance and relatively low
expense." Glass Lewis's report noted that there would be no
increase in management fees and stated "Elliott has not recommended
a specific alternative strategy for shareholders to consider. We do
not believe that it is in the Fund's best interest to operate
without an active management agreement." "The Board is pleased that
ISS and Glass Lewis have recognized the compelling reasons for
approving the new management agreement," said R. Jay Gerken,
Chairman of the Board. "Acting in the interests of all Fund
shareholders, the Fund's Board has approved, and recommended that
shareholders vote for approval of the new agreement, using the
white proxy card they have received from the Fund. "Under SBAM's
management, the Fund has outperformed its benchmark, the Standard
& Poor's 500 Index, based on both market price and net asset
value, over the three-year, five-year and ten-year periods ended
August 31, 2005, according to Lipper Analytical Services,"
continued Mr. Gerken. "Furthermore, the Fund will be aligned with
an organization with an excellent reputation, focused solely on
asset management following completion of the Legg Mason
transaction. Legg Mason has a strong record of long-term
performance in asset management." As of May 31, 2005, 98% of Legg
Mason's open- and closed-end mutual fund assets had beaten their
Lipper category averages over ten years, according to Lipper
Analytical New Applications (excluding money markets). The Fund's
Directors, including all Independent Directors, approved a new
management agreement between SBAM and the Fund, following the
announcement of Citigroup's intention to sell its asset management
business to Legg Mason, in exchange for Legg Mason's broker-dealer
business and other consideration. The Legg Mason transaction is
expected to be completed by Citigroup in the fourth quarter of this
year, at which time the new management agreement is intended to
become effective. Shareholders can vote for approval of the new
agreement by using the white proxy card they received in the mail
from the Fund. If shares are held in a brokerage account, a broker
can vote for the shareholder only if the broker has been instructed
to do so by the shareholder. Shareholders can give their brokers
instructions simply by signing and dating the white proxy card
provided by the Fund and returning it in a postage-paid envelope
provided to them or by following the instructions for phone or
Internet voting on the proxy card. Shareholders need not contact
their brokers directly. Shareholders may obtain a white proxy card
and return envelope by calling 1-888-293-6728. The Salomon Brothers
Fund Inc., a diversified investment management company, is managed
by SBAM, an indirect wholly owned subsidiary of Citigroup Inc. For
more information, call 1-888-777-0102 or 1-800-SALOMON, or consult
the Fund's web site at www.citigroupam.com. Please note that past
performance does not guarantee future results. Investment return
and principal value of a fund will fluctuate. Current performance
may be lower or higher than the performance data quoted.
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