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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 2007 proxy season.

During that period, the Comptroller filed 22 different types of resolutions with more than 100 companies on corporate governance and social and environmental issues.

“I am very pleased with the results of our 2007 initiatives. I 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.”

Thompson added: “These corporate leaders clearly understand that these reforms are needed to shore up investor confidence in the market and corporate boards, to promote long-term, sustainable profitability of their companies, and to enhance the investment interests of their shareholders.”

You can view the full report at www.comptroller.nyc.gov.

The measures 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.

Corporate Governance Proposals

In 2007, Thompson submitted shareholder proposals seeking eight specific corporate governance reforms to 32 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.

“The 2007 corporate governance proposals met with considerable success,” Thompson said. “Proposals were adopted by the board of directors at 10 companies, and shareholder support for proposals was strong, with some winning majority votes at 11 companies.”

Several highlights:

• The proposal that sought the repeal of the classified structure of the Board of Directors and called for the annual election of all directors was adopted at Blockbuster, Inc., and won majority votes at five companies: Axcelis Technologies, Cumulus Media, O’Charley’s Inc., Neurocrine Biosciences and Ultratech, Inc.
  
  
• The proposal for board adoption of a by-law amendment to establish a majority vote standard for director election was most successful. The proposal was submitted to nine companies, and was adopted by the Boards of Directors at six: Teradyne, Inc., Cooper Tire & Rubber Company, Lexmark International, Rigel Pharmaceuticals, Medicis Pharmaceuticals and Journal Register Company, and won majority vote at Lear Corporation.
  
  
• The proposal for the adoption of a policy to allow shareholders an advisory vote to ratify the compensation of named executive officers won a majority vote of 57 percent at Blockbuster, Inc. - the first ever majority vote since the proposal was first introduced in the U.S. in 2006 – and Par Pharmaceuticals.

Social and Environmental Responsibility Proposals & Significant Results

Proposals regarding corporate social and environmental responsibility issues were submitted to 76 companies, requesting either board adoption of a specific policy or issuance of reports disclosing board policy or actions on 14 specific issues. Proposals were adopted by the Boards of Directors at 28 companies.

Thompson submitted proposals asking companies to take on the following actions: implement the International Labor Organization (ILO) 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 policy 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 the environmental impacts of operations in Indonesia, and review and report on company security arrangements with the Indonesian government and security forces; 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; report to the shareholders any new initiatives instituted by management to address specific health, environmental and social concerns of survivors in Bhopal, India; institute policies to help protect freedom of access to the Internet; report on the negative social and reputational impacts of reported and known cases of management non-compliance with ILO Conventions and company legal and regularly controls; and, report on policies and procedures for minimizing customer exposure to toxic substances and hazardous components in marketed products.

Several highlights:

• The proposal which called on companies to implement the ILO and UN Human Rights Norms in their international operations was adopted by Bed Bath & Beyond.
  
  
• Nine companies adopted the proposal to issue a sustainability report: Campbell Soup, Dean Foods, General Dynamics Corp., Burlington North Santa Fe, Harrah’s Entertainment, Sprint Nextel, US Bancorp, The Williams Companies, Inc., and El Paso Corporation.
  
  
• Three companies – Baker Hughes, Wal-Mart Stores, and Seagate Technology – agreed to implement the MacBride Principles and to allow independent monitoring of their compliance with the Principles.
  
  
• Seven companies agreed to adopt an explicit prohibition against workplace discrimination based on sexual orientation and gender identity. They are: Robert Half International, Advance Auto Parts, Wesco International, First Horizon Financial, Cleveland Cliffs, Armor Holdings and Sky West, Inc. The proposal won a majority vote of 52.2 percent at HCC Insurance, making it the fourth management-opposed social proposal ever to win majority support.
  
  
• Five companies adopted a proposal to disclosure their political contributions. They are: Chevron Texaco, Limited Brands, EMC Corporation, Cigna Corporation and Lockheed Martin.

In addition to Thompson, trustees serving on the New York City Pension Funds are:

New York City 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; Michael Currid, Captains’ Rep.; John J. McDonnell, Chiefs’ Rep., and Stephen J. Carbone, Lieutenants’ Rep., Uniformed Fire Officers Association; and, Joseph Gagliardi, Marine Engineers Association.

New York City 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 D. Mullins, Sergeants Benevolent Association; Thomas Drogan, Lieutenants Benevolent Association; and, John Driscoll, Captains Endowment Association.

New York City Employees’ Retirement System: 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, Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.

Teachers’ Retirement System: 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.

Board of Education Retirement System: Mayoral appointees Schools Chancellor Joel Klein, Alan Aviles, Philip Berry, David Chang, Tino Hernandez, Edison O. Jackson, Richard Menschel and Marita Regan; Luis Peguero, (Bronx) Patrick Sullivan (Manhattan), Michael Flowers (Queens), Wendy Gilgeous (Brooklyn), and Joan Correale (Staten Island); and employee members Joseph D’Amico of the International Union of Operating Engineers, Local 891, and Milagros Rodriguez of District Council 37, Local 372.

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