A debate has broken out over the Port of Seattle Chief Executive Officer Tay Yoshitani’s role on the board of Seattle-based freight forwarder Expeditors International.
On Aug. 24, a group of 13 Washington state legislators wrote a letter
to Seattle’s port commissioners that they were concerned the post on Expeditors’ board was a conflict of interest for Yoshitani.
“We are concerned about the appearance of a conflict of interest and ethical issues raised by the Port of Seattle CEO’s dual employment on the board of directors of an international logistics company, Expeditors’ International, with direct economic interest in the Port’s operations,” said the letter from State Rep. Zack Hudgins. “As the board president of Expeditor’s International, Mr. Yoshitani will receive additional annual compensation of approximately $250,000, including stock options, for a total annual compensation of more than $600,000. It is our understanding that no other major port director in the U.S. sits on the board of a private company in the transportation or logistics industry.”
The legislators said the dual positions give the appearance that Yoshitani and Expeditors could benefit from the arrangement.
“It appears to the public that Mr. Yoshitani may directly and personally benefit by giving Expeditors’ customers a competitive advantage over other Port of Seattle customers, and as Port CEO he has the power to prioritize his personal profit over the public mission of the taxpayer-supported Port of Seattle,” the letter said.
On Monday, Seattle Port Commissioner Tom Albo, chair of the commission’s audit committee, wrote back
to the legislators that Yoshitani’s position with Expeditors was vetted by the port’s general counsel and is permissible.
“Mr. Yoshitani’s appointment to the board of directors of Expeditors International was reviewed by the port’s general counsel to ensure compliance with the port’s Code of Conduct for employees and for any potential conflict of interest before he joined the Board,” Albo wrote. “The general counsel of Expeditors International has informed us that the appointment was reviewed in accordance with its internal policies and the rules promulgated by the Nasdaq Stock Market and the Securities and Exchange Commission regarding independence and related party transactions.”
Albo also rebuked the state legislators for misrepresenting Yoshitani’s position at the logistics company.
“Mr. Yoshitani does not have dual employment with both Expeditors’ International and the Port of Seattle,” he wrote. “As a member of their board of directors, he is not an employee of that company. Also, Mr. Yoshitani serves as one of nine board members and is neither the Chairman of the Board, the Lead Independent Director, nor the president of the board at Expeditors (a position that does not exist).”
However, Seattle port commissioner Gael Tarleton disagreed with her fellow commissioners and has asked Yoshitani to step down from the Expeditors board. She’s urged the commission to push Yoshitani to either step down as CEO or from the private company’s board.
“I am outraged by these recent events,” Tarleton, who is running for the state legislature, posted
on her Website Wednesday. “On the record, I had previously voted against giving the CEO an employment contract that allowed this to happen. I have twice voted against a pay raise for our Port CEO; because, in a recession when most people are struggling to find work, it isn’t right to give CEOs outrageous salary increases. And the legislators who have flagged their concern are right: this too is wrong.” - Eric Johnson