Comptroller and Systems call on companies to declassify their Boards of Directors

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Comptroller William C. Thompson, Jr., on behalf of the New York City Systems, is urging six companies to repeal the classified structure of their Boards of Directors to allow for the annual elections of all of their directors.

A company with a classified board groups directors into classes, typically three, with each class elected at successive annual meetings. The Funds are opposed to the structure because it limits shareholders’ ability to evaluate and elect a company’s entire Board of Directors on an annual basis and reduces accountability.

“The ability to elect directors is the single most important use of the shareholder franchise,” Thompson said. “Accordingly, directors should be accountable to shareholders on an annual basis. The election of directors by classes, for three-year terms, in our opinion, precludes the full exercise of the rights of shareholders to approve or disapprove annually the performance of a director or directors.”

The proposals are sponsored by the New York City Employees’ Retirement System (NYCERS), Teachers’ Retirement System for the City of New York (TRS), New York City Police Pension Fund, New York City Fire Department Pension Fund and the New York City Board of Education Retirement System (BERS).

Thompson filed the resolutions with Axcelis Technologies of Beverly, MA, Belo Corporation of Dallas, TX, Cumulus Media, Inc. of Atlanta, GA, Invacare Corporation of Elyria, OH, O’Charley’s Inc. of Nashville, TN, and Spectrum Brands, Inc. of Atlanta, GA.

Collectively, the Funds have more than $21.4 million invested in the six companies.

Besides Thompson, the Pension Funds’ trustees are:

Fire Department Pension Fund: 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.

Police Pension Fund: 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; Michael Palladino, Detectives Endowment Association; Edward Mullins, Sergeants Benevolent Association; Anthony Garvey, Lieutenants Benevolent Association; and, John Driscoll, Captains Endowment Association.

NYCERS: New York City Finance Commissioner Martha E. Stark (Chair); New York City Public Advocate Betsy Gotbaum; Borough Presidents Scott Stringer (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: New York City Finance Commissioner Martha E. 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: mayoral appointees Schools Chancellor Joel Klein, Alan Aviles, Philip Berry, David Chang, Tino Hernandez, Augusta Souza Kappner, Richard Menschel and Marita Regan; Borough President appointees Jesse Mojica (Bronx), Martine G. Guerrier (Brooklyn), Vivian Farmery (Manhattan), Michael Flowers (Queens), and Joan Correale (Staten Island); and employee members Thomas J. Malanga of the International Union of Operating Engineers, Local 891, and  Milagros Rodriguez of District Council 37, Local 372.