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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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EL PASO CORPORATION
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(Name of Registrant as Specified in its Charter)
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The company provided the following statement to some of its
shareholders:
Statement Regarding Use of Union Contractors
and Compensation Philosophy
El Paso is committed to using union contractors. Our experience is that the
unionized pipeline contractors are highly skilled and competitive.
El Paso uses pipeline contractors to perform a substantial majority of all
pipeline construction and pipeline maintenance projects on which union
contractors bid. On large projects, the percentage has historically been
about 80% union, and 20% non-union.
Because of our positive experience with union contractors and our desire to
ensure that our union contractors have substantial, ongoing work, El Paso
also favors utilizing union contractors on projects that have historically
been awarded to smaller, non-union contractors.
We have been working intensively with our unions for the past six months to
increase their share of our business. We have previously advised the unions
that we are committed to working with the union contractors to increase
their share of our medium and small scale projects, and to bundle those
projects where this enables the union contractors to handle those projects
on a competitive basis.
Our unions have also raised issues concerning the pipeline safety records
of non-union pipeline contractors. We have reviewed and will continue to
review those records and will not use any pipeline contractor that fails to
meet our high standards for pipeline safety.
The unions have also proposed that we adopt a "Quality Contracting Program"
in connection with our competitive bidding processes. As we have previously
advised the unions, we are giving serious consideration to the adoption of
such a program.
I also note that El Paso's 2004 pipeline capital budget is expected to be
approximately $850 million, while the Zilkha/Wyatt group contemplates
shrinking the pipeline budget to $600 million, which would offer a
significantly lesser workflow to our union contractors.
In summary, El Paso has a very strong commitment to the use of union
contractors and, as we have previously committed to the unions, we intend
to increase their share of our pipeline construction and maintenance work.
We will continue to work with our unions to address any concerns that they
may have.
El Paso has reconstituted its Compensation Committee in 2003 and the new
Committee is undertaking a review of all of our compensation practices. We
intend to modify our compensation policies to align them with current best
practices. We are working with corporate governance groups that have
proposed compensation guidelines for public companies to implement
compensation guidelines that are consistent with those proposals.
Ronald L. Kuehn, Jr.
Chairman of the Board and Chief Executive Officer