| New York City Comptroller William C. Thompson, Jr. and the New York City Pension Funds call on five Fortune 500 companies to improve product safety at a news conference in Herald Square on Wednesday, December 19, 2007. Pictured (l to r) are: Gregory Floyd, President, Teamsters Local 237; Thompson; Michael Musuraca, Assistant Director of Research and Negotiations, DC 37; and, New York City Public Advocate Betsy Gotbaum. |
View Home Depot resolution
View JC Penney resolution
View Mattell resolution
View Target resolution
View Wal-Mart resolution
New York City Comptroller William C. Thompson, Jr., on behalf of the New York City Pension Funds, has filed shareholder resolutions demanding that five major retailers and toy manufacturers take steps to minimize consumer exposure to toxic and hazardous imported products.
Comptroller Thompson – who announced the initiatives at a news conference in Herald Square Park - filed the measures with: JC Penny Company of Plano, TX; The Home Depot Inc. of Atlanta, GA; Mattel, Inc. of El Segundo, CA; Target Corporation of Minneapolis, MN; and Wal-Mart of Bentonville, AR.
The New York City Pension Funds behind the measures are the: New York City Employees’ Retirement System (NYCERS), New York City Teachers’ Retirement System (TRS), New York City Police Department Pension Fund, the New York City Fire Department Pension Fund, and the Board of Education Retirement System (BERS).
“Safety is paramount,” Thompson said. “We must protect consumers and do whatever we can to make sure that dangerous products do not wind up in the hands of children. In order to accomplish this goal, investors must take proactive steps towards preventing recalls, which also are extremely costly in terms of reputation and bottom lines. As one of this nation’s largest retirement systems, the New York City Pension Funds will help to lead the charge to improve product safety in this country.”
Public Advocate Betsy Gotbaum, who joined Thompson along with trustees from the system, said: “Keeping children safe is one of the most basic and important things we can do - and with millions of toys being recalled this year, the need for more protections is clear. By urging companies to report on their product safety, the city’s Pension Funds are not only contributing to a more transparent process but also helping shareholders get the best possible return on their money. Businesses that prevent recalls avoid irreparable harm to their brand and corporate image. The simple truth? Companies that are willing to be held accountable for their safety procedures make for better long-term investments. I am proud that the Pension Funds are once again leading the way in shareholder activism.”
Bronx Borough President Adolfo Carrión said: “It is imperative that toy retailers take every reasonable step to avoid selling unsafe toys to our children. The shareholder resolutions filed by the Comptroller on behalf of the New York City pension funds will force the targeted companies to openly and unambiguously address their responsibility to make changes that will better protect our children. Additionally, employing better safety practices will protect our investments in these companies from disastrous recalls. Working to ensure the best safety practices at these companies are extremely important for our children and our pension funds.”
Brooklyn Borough President Marty Markowtiz said: “I commend the Comptroller for insisting upon thorough reporting by these corporations regarding the safety of the products they produce and sell—especially those designed for use by children. By reminding manufacturers and retailers that safe products and full disclosure are, in fact, good for business, we send a clear message as only New Yorkers can—that integrity and accountability is the real bottom line.”
Manhattan Borough President Scott M. Stringer said: “We are trying to help these companies, not hurt them. When it comes to product safety, we all want the same thing: consumers spending more and worrying less. These shareholder resolutions are a classic win-win. We protect families, and protect shareholder value at the same time.”
Lillian Roberts, Executive Director, District Council 37, AFSME, AFL-CIO said: “The Product Safety resolutions highlight the need to protect consumers, but just as importantly, speak to the need for investors to prod companies to recognize that the treatment of workers, who produce, distribute, and sell the goods, is a crucial component in insuring product safety. Companies must insure that workers are treated fairly, provided healthy and safe working conditions, and afforded the rights of free association, including the right to form unions and collectively bargain over the terms and conditions of employment.”
Greg Floyd, President, Teamsters Local 237 said: “We all carry the responsibility of taking any steps necessary to ensure the safety of our children and the fair treatment of our workforce. Comptroller Thompson’s plan to use the City’s pension funds to compel companies to review and improve their product safety policies will put some weight behind our words as we continue to fight for the rights of consumers and the labor force. Product recalls are dangerous and costly, but can be greatly reduced by forcing companies to meet higher standards of accountability and safety. With a Pension Fund that holds shares valued at over half a billion dollars, we are in a unique position to change they way these companies conduct their business in a manner that protects the safety needs of the consumer and laborer,”
Tracy Shelton, a Consumer Attorney with the New York Public Interest Research Group (NYPIRG) said: “NYPIRG is very supportive of the measures Comptroller Thompson and the Pension Funds are taking to protect consumers from a range of hazardous products. 2007 has been described as the year of the recall. Millions of toys, including famous playthings like Thomas the Tank Engine and Barbie, have been recalled in 2007 for hazards including excessive levels of toxic lead, dangerous small magnets, and choking dangers. These recent events highlight the need for the important shareholder resolutions filed by Mr. Thompson and the Pension Funds.”
The resolutions, which can be viewed at www.comptroller.nyc.gov, were filed over the last few weeks and are expected to be put before each company’s shareholders at their upcoming annual meetings. The resolutions urge the companies to publish reports – due by Dec. 31, 2008 - that outline business practices on product safety and explore options for new and improved guidelines. These reports should:
- Summarize attempts by the company to secure its supply chain of goods marketed
- Review which, if any, product lines and categories sold may be affected by product safety concerns, and
- Recommend options for new initiatives or actions management may take to respond to this public policy challenge, beyond those initiatives or actions already required by law.
Thompson and the Funds were spurred into action by the recall of millions of hazardous brand name and supply line products over the past few years. Among the examples or problematic products cited in the resolutions:
- Since 2004, there have been 18 recalls of many thousands of JC Penny retailed products, including toys, children’s clothing, Christmas ornaments, electrical appliances, and baby strollers.
- Since 2005 there have been 56 recalls of Home Depot retailed products, including gas grills, lawn tractors, children’s lamps, and other electronic appliances.
- Since 2006 there have been eight major recalls of over 13 millions of hazardous Mattel products marketed in the United States, 10 million of which were recalled in 2007 alone.
- Since 2005 there have been 38 recalls of millions of Target retailed products, including toys, baby rattles, school supplies, children’s games, and electrical appliances.
- Since 2004 there have been 65 recalls involving thousands of potentially hazardous Wal-Mart retailed products, including toys, infant car seats children’s accessories, and electrical appliances.
Collectively, the Pension Funds hold millions of shares in these companies valued at more than $787 million. The breakdown is as follows: 673,000 shares in JC Penny valued at $45,825,076; 5,662,029 shares in Home Depot valued at $210,457,618; 1,539,698 shares in Mattel valued at $37,513,911; 2,540,595 shares in Target valued at $157,561,410; and 2,778,000 shares in Wal-Mart valued at $335,842,852.
Other shareholders have co-sponsored these resolutions, including the State of Connecticut, Amalgamated Bank, and several religious shareholders affiliated with the Inter Faith Center on Corporate Responsibility.
“We believe that by publishing the requested evaluation of company policies and practices relating to product safety, the Company can help promote public trust, minimize legal liability, protect brand reputation, and safeguard and grow its market share,” the measures read. “We urge you to vote your shares FOR this resolution.”
“Companies should have policies in place to catch unsafe products before they are stocked on store shelves,” Thompson added. “It is vital to the health and safety of consumers and their families that retailers take these concerns seriously and make every effort so that no one is endangered by an unsafe product.”
Thompson did not identify any one country in these measures, explaining that his concerns are broader and about overall product safety.
“While big box and discount stores provide significant cost savings for working families, the recent proliferation of unsafe imports demands increased vigilance, especially around the holiday season,” Thompson said. “No price can be put on safety, and substandard products put the public at risk. This is about the toys our children play with, the food we put on our tables, and other everyday items we use to improve our lives. The measures I have recommended should be used as a first step towards showing the public that what’s on their shelves is safe.”
The New York City Pension Funds have been at the fore of shareholder activism in pressuring many of America’s largest companies to improve workplace conditions, protect the environment, promote human rights abroad, and adhere to accepted corporate governance standards. Besides Thompson, the Pension Funds’ trustees are:
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 Gregory Floyd, 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.
Police Pension Fund: Mayor Michael Bloomberg; New York City Police Commissioner Raymond Kelly (Chair); New York City Finance Commissioner Martha E. Stark; 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.
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.
BERS: 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), 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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