Look what changes the City of New York was able to secure from a bunch of publicly traded companies:
THOMPSON REPORTS ON PENSION FUNDS' 2008 SHAREHOLDER PROPOSALS
New York City Comptroller William C. Thompson, Jr. today issued his annual report detailing the results of shareholder resolutions filed on behalf of the New York City Pension Funds during the 2008 proxy season.
During that period, the Comptroller filed 23 different types of resolutions with more than 110 companies regarding corporate governance and social and environmental issues.
"I want to commend the trustees of the New York City Pension Funds for endorsing a comprehensive program of corporate governance and social responsibility reforms," Thompson said. "I also want to applaud the Boards of Directors of the companies who agreed with, and adopted, our proposals. As a result,
The measures - aimed at preserving shareholder value and mitigating risks to corporate reputation - were filed on behalf of the: New York City Employees' Retirement System, Teachers' Retirement System of New York City, New York City Police Department Pension Fund, New York City Fire Department Pension Fund, and New York City Board of Education Retirement System. The full report is available at www.comptroller.nyc.gov .
Corporate Governance Proposals
In 2008, the Comptroller filed shareholder proposals on corporate governance issues with 38 companies requesting their boards of directors adopt one or more of eight reforms. Proposals were adopted by the boards of directors at 13 companies, and shareholder support for proposals was strong, with some winning majority votes at 12 companies.
The proposals sought the following reforms: adoption of stronger criteria of director independence for members of board audit and compensation committees; adoption of a board protocol to effectively and fairly address shareholder proposals that win majority votes; adoption of a resolution to repeal the classified structure of the board of directors and establish annual elections of all directors; adoption of a policy requiring that a significant portion of future stock options granted to senior executives be performance-based; adoption of a pay-for-superior performance standard in company executive compensation plans for senior executives; adoption of a by-law amendment to establish a majority vote standard in director elections; and adoption of a policy to allow shareholders in an advisory vote to ratify the compensation of named executive officers. Several highlights:
- Four companies adopted the proposal seeking the repeal of the classified structure of the board of directors and calling for the annual election of all directors: Cumulus Media, Inc.; Human Genome Sciences; O'Charley's Inc.; and Stone Energy Corporation. It won majority votes at eight other companies.
- The proposal that called for the adoption of a pay-for-superior performance standard in company executive compensation plans for senior executives was supported by a 91.34 percent majority vote at Credence Systems, with board support.
- The proposal that sought the adoption of stronger criteria of director independence for directors who serve on board compensation committees was substantively adopted by the Board of Directors of La-Z-Boy, Inc., and won a 34.84 percent favorable vote at Southwest Airlines Co.
- Shareholder support for a proposal that sought board adoption of a by-law amendment to establish a majority vote standard in director elections continued to rise. The proposal was submitted to eight companies and adopted by the board of directors at five: CV Therapeutics, Inc.; KEMET Corporation; MGIC Investment Corp.; UTStarcom, Inc.; and BearingPoint, Inc.
- A proposal that sought the adoption of a policy to allow shareholders an advisory vote to ratify the compensation of named executive officers was adopted by the Board of Directors of Blockbuster Inc. It was withdrawn at Par Pharmaceuticals based on the Board of Directors' commitment to adopt the policy in 2009.
Social and Environmental Responsibility Proposals & Significant Results
Proposals regarding corporate social and environmental responsibility issues were submitted to 80 companies, requesting either board adoption of a specific policy or issuance of reports disclosing board policy or actions on 15 specific issues. Proposals were adopted by the boards of directors at 31 companies, and one proposal received a majority vote of 52.8 percent.
Thompson submitted proposals asking companies to take the following actions: implement the International Labor Organization and United Nations Human Rights Norms in their international operations, and allow for independent monitoring of compliance; issue a sustainability report, i.e. disclosing social, environmental, and economic performance; implement the MacBride Principles and allow for independent monitoring of compliance; adopt an explicit prohibition of workplace discrimination based on sexual orientation and gender identity; report on company policies to prevent negative racial and ethnic stereotyping in products; report on efforts to reduce carbon dioxide and other emissions from existing and proposed power plants; disclose political contributions;
Report on company policy and procedures regarding company assessment of the adequacy of host countries' standards to protect human health, the environment and company reputation; institute policies to help protect freedom of access to the Internet; report on policies and procedures for minimizing customer exposure to toxic substances and hazardous components in marketed products; report on company code of conduct and compliance mechanism for vendors, subcontractors and buying-agents in countries where company sources;
Publicly adopt quantitative goals based on current and emerging technologies for reducing total greenhouse gas emissions from company operations and issue a report to shareholders on plans to achieve these goals; review and report on progress towards implementation of the 2001 Cocoa Protocol against forced child labor; report on company policies, practices and procedures for obtaining consent of indigenous peoples affected by company activities, whether as operator or minority partner, through recognized and official governance structures, and company policies to avoid contact with indigenous peoples living in voluntary isolation; and report on company actions to work with policymakers to design incentives that will provide financial returns for companies to reduce greenhouse gas emissions by improving the efficiency with which customers use energy. Highlights include:
- The proposal that asked companies to issue a sustainability report was adopted by six companies: Allegheny Technologies; Capital One Financial Corp.; CIGNA Corp.; Hartford Financial Services Group, Inc.; Dillard's, Inc.; and, Regions Financial Corp.
- One company--Borland Software Corporation--agreed to implement the MacBride Principles and allow independent monitoring of its compliance with the Principles.
- Twelve companies--AK Steel Holding Co.; BorgWarner, Inc.; Brinks Company; Erie Insurance; Fidelity National Financial; Kelley Services, Inc.; Liberty Global, Inc.; Marshall & Ilsley Corp.; SPX Corporation; Synovus Financial Corp.; Huntsman Corporation; and Tesoro Corporation--agreed to adopt an explicit prohibition against workplace discrimination based on sexual orientation and gender identity. The proposal won a majority vote of 52.8 percent at HCC Insurance--a 0.6 percent increase over the 52.2 percent vote it received in 2007. A similar version of the proposal, which addressed discrimination based on sexual orientation but did not include gender identity, was resubmitted to ExxonMobil. Shareholder support for the proposal continued on an upward trend, with the proposal garnering 39.6 percent of the shares voted--an increase of 1.9 percent over the 2007 vote of 37.7 percent.
- The proposal which asked selected companies in the coal and electric power industries to report on their efforts to reduce carbon dioxide and other emissions from their existing operations and use of coal was adopted by El Paso Corporation.
- Overall, shareholder support for climate change-related proposals continued to rise, as evidenced by a 39.6 percent favorable vote at Consol Energy - a 32.8 percent increase over the 2007 vote in support of a similar proposal - and a 30.8 percent vote at Massey Energy Company - an 11.8 percent increase over the 19.0 percent vote received in 2007.
- The proposal that called for board adoption of, and a report on, quantitative goals for reducing total greenhouse gas emissions from company operations, based on current emerging technologies, was adopted by Williams Companies, Inc.
- Five companies adopted a proposal that asked selected companies to report on their policies and procedures for minimizing customer exposure to toxic substances and hazardous components in marketed products: Best Buy Company; Mattel, Inc.; Pier 1 Imports; Target Corporation; and J.C. Penney Company.
- Four companies adopted a proposal asking them to disclose their political contributions: Computer Sciences Corp.; Devon Energy Corp.; Duke Energy Corp.; and United Technologies. Shareholder support for the proposal trended upward at Charles Schwab Corp., from 25.0 percent in 2007 to 28.0 percent in 2008; at Halliburton Company, from 24.4 percent to 32.1 percent; and at Union Pacific Corp., from 29.0 percent to 35.4 percent.
In addition to Comptroller Thompson, trustees serving on the New York City Pension Funds are:
NYCERS: New York City Finance Commissioner Martha E. Stark (Chair); New York City Public Advocate
TRS: Stark (Chair); Deputy Chancellor Kathleen Grimm,
Police: Mayor Michael Bloomberg; New York City Finance Commissioner Martha E. Stark; New York City Police Commissioner Raymond Kelly (Chair); Patrick Lynch, Patrolmen's Benevolent Association;
Fire: Mayor Michael Bloomberg; New York City Fire Commissioner Nicholas Scoppetta (Chair); Stark;
BERS: mayoral appointees Schools Chancellor Joel Klein, Alan Aviles, Philip Berry, David Chang, Tino Hernandez, Edison O. Jackson, Richard Menschel and Marita Regan; Patrick Sullivan (Manhattan), Wendy Gilgeous (Brooklyn), and Joan Correale (Staten Island); and employee members Joseph D'Amico of the IUOE Local 891 member and Milagros Rodriguez of District Council 37, Local 372.
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