View Majority Votes Proposal

New York City Comptroller William C. Thompson, Jr., on behalf of the City’s five Pension Funds, has filed eight new shareholder proposals urging companies to establish a process for acting on shareholder proposals that win majority votes.

The proposals are part of the Comptroller’s efforts over the last three years to affect needed reforms in the corporate governance arena. The proposals have been filed in response to the long-term unwillingness of many corporate boards of directors to acknowledge majority votes with which they disagree.

“Investors must vigorously oppose the blatant disregard that many corporate boards of directors have for shareholder proposals that win majority votes,” Thompson said. “The accounting and financial scandals of the past year have highlighted the importance of adopting governance reforms across America.”

“We will submit shareholder proposals to intransigent companies and call on their boards to stop stonewalling and to establish procedures for acting on the expressed wishes of their shareholders,” he added.

The proposals were filed over the last few weeks on behalf of the New York City Employees’ Retirement Fund (NYCERS), Teachers Retirement System (TRS), New York City Police Pension Fund, New York City Fire Department Pension Fund, and Board of Education Retirement System (BERS).

The proposals were submitted to: Baker Hughes of Houston, TX; Calpine Corp. of San Jose, CA; Covance Inc. of Princeton, NJ; Delphi Corp. of Troy, MI; May Department Stores of St. Louis, MO; Saks Inc. of Birmingham, AL; VF Corp. of Greensboro, NC; and, Visteon Corp. of Dearborn, MI.

Additionally, the funds refiled a ninth proposal with Steris Corporation of Mentor, OH. Last year, the funds proposal with Steris garnered 3,470,348 shares voted in its favor, allowing the funds to resubmit it this season.

The funds collectively have: 984,000 shares valued at more than $42 million in Baker Hughes; 1.1 million shares valued at more than $3.9 million in Calpine; 415,000 shares valued at more than $17.6 million in Covance; 1.5 million shares valued at more than $11.3 million in Delphi; 1.1 million shares values at more than $39.7 million in May Department Stores; 387,000 shares valued at more than $5.5 million in Saks; 238,000 shares valued at more than $5.6 million in Steris; 359,000 shares valued at more than $19 million in VF; and, 432,000 shares valued at more than $3.2 million in Visteon.

Thompson noted that over the past decade proxy votes cast in support of shareholder proposals seeking corporate governance reform of issues such as classified boards, director independence and golden parachutes have markedly increased. While some companies have responded to shareholder proposals by adopting needed reforms, many corporate boards of directors dismiss these majority votes, deliberately disregarding the wishes of their shareholders.

The proposals specifically request that a corporation’s Board of Director’s “adopt a policy establishing an engagement process with the proponents of shareholder proposals that are supported by a majority of the votes cast, excluding abstentions and broker non-votes, at any annual meeting.”

To date, the New York City Pension funds and retirement systems have reached agreement with a number of companies after filing majority vote proposals. Just last year, the boards of four companies - Maytag Corp., Starwood Hotel & Resort, Manor Care and Safeway, Inc. - adopted the proposal. In 2003, the New York City systems came to an agreement with Goodyear Tire & Rubber Co., Pacificare and Hasbro.

The trustees of the city’s five pension boards are:

New York City Fire Department Pension Fund: Comptroller Thompson, Mayor Michael Bloomberg; New York City Fire Commissioner Nicholas Scoppetta (Chair); New York City Finance Commissioner Martha E. Stark; Stephen Cassidy, President, James Slevin, Vice President, Robert Straub, Treasurer, and John Kelly, Brooklyn Representative and Chair, Uniformed Firefighters Association of Greater New York; Peter Gorman, President and Captains’ Rep., Nicholas J. Visconti, Chiefs’ Rep., and Stephen J. Carbone, Lieutenants’ Rep., Uniformed Fire Officers Association; and, Joseph Gagliardi, Marine Engineers Association.

New York City Police Pension Fund: Comptroller Thompson; Mayor Bloomberg; Commissioner Stark; New York City Police Commissioner Raymond Kelly (Chair); Patrick Lynch, Patrolmen’s Benevolent Association; Michael Palladino, Detectives Endowment Association; Edwin Mullins, Sergeants Benevolent Association; Anthony Garvey, Lieutenants Benevolent Association; and, John Driscoll, Captains Endowment Association.

NYCERS: Comptroller Thompson; Commissioner Stark (Chair); New York City Public Advocate Betsy Gotbaum; Borough Presidents C. Virginia Fields (Manhattan), Helen Marshall (Queens), Marty Markowitz (Brooklyn), Adolfo Carrion (Bronx), and James Molinaro (Staten Island); Lillian Roberts, Executive Director, District Council 37, AFSCME; Roger Toussaint, President Transport Workers Union Local 100; and, Carroll (Carl) Haynes, President, International Brotherhood of Teamsters, Local 237.

TRS: Comptroller Thompson; Commissioner Stark (Chair); Deputy Chancellor Kathleen Grimm, New York City Department of Education; and, Sandra March, Melvyn Aaronson and Mona Romain, all of the United Federation of Teachers.

BERS: Schools Chancellor Joel Klein, Alan Aviles, Phillip Berry, David Chang, Tino Hernandez, Souza Kappner, Richard Menschel and Marita Regan; Borough President appointees Jesse Mojica (Bronx), Martine Guerrier (Brooklyn), Jacquelyn Kamin (Manhattan), Michael Flowers (Queens) and Joan Correale (Staten Island); and employee members Thomas J. Malanga, International Union of Operating Engineers, Local 891, and Milagros Rodriguez of District Council 37, Local 372.

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