MCI Investors Withhold Votes

More than a quarter of MCI Inc.’s shares were withheld Monday in the reelection of the company’s board of directors, a sizable protest against its decision to accept an $8.5-billion buyout from Verizon Communications Inc. rather than a higher-priced offer from Qwest Communications International Inc.

Chief Executive Michael Capellas and Chairman Nicholas Katzenbach were reelected with about 72% of the shares cast at the telecommunications company’s annual shareholder meeting.

Seven other board members were reelected by a similar margin.

It was unclear whether the protest vote would spur Qwest, which withdrew its $9.9-billion bid this month, to reenter the bidding against Verizon.

Denver-based Qwest issued a statement saying the vote “demonstrates that a significant portion of MCI shareholders are unhappy with the MCI management and board decision to ... accept a lower offer for MCI. That being said, we will continue to do what is in the best interests of our shareowners, customers and employees.”

Under current securities rules, it is essentially impossible to block a nominee’s election or reelection to the board, even if a majority of voting shares are withheld.

Still, a strong display of dissent can prompt change.

The MCI meeting was calm despite the show of dissent. Fewer than 50 shareholders attended, and none asked questions of MCI management.