Comptroller Stringer And The New York City Pension Funds Reach Agreement With Staples On Proxy Access

(New York, NY) – Staples, Inc. (NASDAQ: SPLS) and the New York City Comptroller Scott M. Stringer and the $163 billion New York City Pension Funds (the “NYC Funds”) along with the Illinois State Board of Investment and The Philadelphia Public Employees Retirement System announced today that the company has agreed to submit a management-supported proxy access bylaw amendment to be voted upon by shareowners at the Company’s 2016 meeting. The bylaw amendment will become effective if approved by shareowners at that meeting.

“Staples has taken an important step for shareowner rights and I applaud the company for being responsive to investors,” said Comptroller Stringer, who serves as investment advisor, custodian and a trustee of the NYC Funds. “Proxy access is a fundamental shareowner right. A three percent ownership threshold over three years to exercise that right is reasonable and meaningful. The momentum for proxy access is evident and we expect more companies to follow Staples’ lead.”

“Staples has a history of strong corporate governance and constructive dialogue with shareholders,” said Ron Sargent, Chairman and Chief Executive Officer, Staples. “This agreement is a result of our ongoing discussions with shareholders. We are pleased that the agreement protects the rights of all shareholders and enables long-term shareholders to nominate candidates to our board of directors.”

According to the terms of the agreement, the bylaw amendment will:

• Permit shareowners (not to exceed a group of 25) holding at least three percent of the shares for three years to nominate up to 20 percent of the directors if the board is 10 or more directors or 25 percent of the directors if the size of the board is 9 or fewer directors;
• Include various other provisions consistent with, or mirroring, the SEC-adopted proxy access rule, including with regard to the eligibility of loaned shares for purposes of satisfying the continuous ownership requirement; and
• Limit nominations by an individual shareowner or group (i) whose formerly-nominated candidate is serving on the board for less than two consecutive terms or (ii) whose candidate failed to garner a minimum of 15% of the votes within the previous two years.

As a result of the agreement, the NYC Funds as lead filer, and the Illinois State Board of Investment and the Philadelphia Public Employees Retirement System as co-filers, have withdrawn their shareowner proposal for the Company’s 2015 annual meeting and plan to support the Company’s proposal at the 2016 annual meeting.

“The City of Philadelphia Public Employees Retirement System congratulates Staples for providing shareholders with proxy access and providing thresholds for nominations along the lines of those proposed by the Securities and Exchange Commission,” said Francis X. Bielli, Executive Director of the Philadelphia Board of Pensions & Retirement.

“Shareowner access to the proxy for the purpose of nominating director candidates is CalPERS top priority to foster director accountability and thereby, long term value creation,” said Anne Simpson, Senior Portfolio Manager and Director of Global Governance at CalPERS. “We appreciate Staples’ commitment to engaging with CalPERS, their responsiveness to investor priorities. Staples is joining a growing list of companies committed to excellence in corporate governance. We applaud their leadership.”

In October 2014, Comptroller Stringer and the NYC Funds launched the Boardroom Accountability Project, a nationwide initiative to give investors a meaningful voice in how corporate boards are elected, by submitting 75 shareowner proposals for the 2015 proxy season. Proxy access is the ability to nominate directors to run against a company’s chosen slate of director nominees using the company’s annual meeting materials. More than 100 proxy access proposals have been filed by investors to be voted on for this coming proxy season.

In recent months, Comptroller Stringer and the NYC Funds have also reached agreements with Big Lots and Whiting Petroleum, both of which will propose proxy access bylaw amendments to permit a shareowner or group of shareowners holding at least three percent of the stock for three years, to nominate up to 25 percent of the company’s board of directors, and to place these nominees on the company’s ballot.

“Public companies should be publicly accountable. Proxy access is an important tool to advancing corporate diversity, fair compensation, and a commitment to diversity. I thank Comptroller Stringer and my fellow trustees of the New York City Employees’ Retirement System for their support of this important measure,” said Brooklyn Borough President Eric L. Adams.

“I commend Comptroller Stringer and my fellow NYC Pension Fund Trustees on the launch of the Boardroom Accountability Project and these notable early proxy access agreement victories to provide stockholders with greater say on how corporate boards are elected. The ability to use proxy access and nominate directors to run against a company’s slate alone may help spur greater oversight, accountability, and responsiveness as well as help increase shareholder value. Ultimately, this is a win for NYC public sector employees whose future livelihood we are entrusted to protect,” said Manhattan Borough President Gale A. Brewer.

“Proxy access is a critical step to increase accountability for companies to their stockholders. I applaud Staples for agreeing to include reasonable access to the proxy for stockholders who wish to nominate directors to the company’s board. The taxpayers of the City of New York and the participants and beneficiaries of the New York City Retirement Systems are well-served by companies that are responsive to the concerns of stockholders by enabling them to participate meaningfully in director elections,” said New York City Finance Commissioner Jacques Jiha.

Comptroller Stringer serves as the investment advisor to, and custodian and a trustee of, the New York City Pension Funds. The New York City Pension Funds are composed of the New York City Employees’ Retirement System, Teachers’ Retirement System, New York City Police Pension Fund, New York City Fire Department Pension Fund and the Board of Education Retirement System.
In addition to Comptroller Stringer, the New York City Pension Funds’ trustees are:

New York City Employees’ Retirement System: Mayor Bill de Blasio’s Representative, John Adler (Chair); New York City Public Advocate Letitia James; Borough Presidents: Gale Brewer (Manhattan), Melinda Katz (Queens), Eric Adams (Brooklyn), James Oddo (Staten Island), and Ruben Diaz, Jr. (Bronx); Henry Garrido , Executive Director, District Council 37, AFSCME; John Samuelsen, President Transport Workers Union Local 100; Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.

Teachers’ Retirement System: Mayor Bill de Blasio’s Appointee, John Adler; Chancellor’s Representative, New York City Department of Education; and Sandra March, Melvyn Aaronson (Chair) and Thomas Brown, all of the United Federation of Teachers.

New York City Police Pension Fund: Mayor Bill de Blasio’s Representative, John Adler; New York City Finance Commissioner Jacques Jiha; New York City Police Commissioner William Bratton (Chair); Patrick Lynch, Patrolmen’s Benevolent Association; Michael Palladino, Detectives Endowment Association; Edward D. Mullins, Sergeants Benevolent Association; Louis Turco, Lieutenants Benevolent Association; and, Roy T. Richter, Captains Endowment Association.

New York City Fire Department Pension Fund: Mayor Bill de Blasio’s Representative, John Adler; New York City Fire Commissioner Daniel A. Nigro (Chair); New York City Finance Commissioner Jacques Jiha; Stephen Cassidy, President, James Slevin, Vice President, Edward Brown, Treasurer, and John Kelly, Brooklyn Representative and Chair, Uniformed Firefighters Association of Greater New York; John Farina, Captains’ Rep.; Paul Ferro, Chiefs’ Rep., and James J. McGowan, Lieutenants’ Rep., Uniformed Fire Officers Association; and, James Briordy, Marine Engineers Association.

Board of Education Retirement System: Schools Chancellor Carmen Fariña; Mayoral: Issac Carmignami, Ezre T. Cleveland, Norm Fruchter, Vanessa Leung, Lori Podvesker, Roberto Soto-Carrion, Miguelina Zorilla-Aristy; Laura Zingmond (Manhattan BP), Fred Baptiste (Brooklyn BP), Debra Dillingham (Queens BP), Robert Powell (Bronx BP) and Kamillah Payne-Hanks (Staten Island BP); and employee members Joseph D’Amico of the IUOE Local 891 and Milagros Rodriguez of District Council 37, Local 372.

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