CalPERS Urges SEC to Rethink Stance on Barring Shareholder Votes
The California Public Employees’ Retirement System and four other pension managers urged the Securities and Exchange Commission to reconsider its stance allowing companies to bar shareholder votes on changing the nomination of board members.
CalPERS, the nation’s biggest pension fund, wants shareholders to have the right to list director candidates on proxy ballots. Proponents say it could improve board independence after accounting scandals at a number of companies, including Enron Corp. and WorldCom Inc.
In a letter last week to SEC Chairman William Donaldson, the funds said failing to review the issue quickly amounted to a pocket veto. Most U.S. firms have annual meetings during which investors can put proposals up for a vote.
The other signers were Connecticut Treasurer Denise Nappier, New York City Comptroller William C. Thompson Jr., Michigan Treasurer Jay B. Rising and Keith Johnson, general counsel of the Wisconsin Investment Board.
CalPERS, Connecticut and New York City are among pension funds seeking changes in corporate governance after losing hundreds of millions of dollars in scandals. California pension funds lost $850 million on investments in Enron and WorldCom.
Investors, led by the American Federation of State, County and Municipal Employees, asked six companies to put the proposal on their annual meeting ballots. The companies are AOL Time Warner Inc., Exxon Mobil Corp., Bank of New York Co., Eastman Kodak Co., Citigroup Inc. and Sears Roebuck & Co.