Comptroller Stringer, NYC Funds: After Five Years of Advocacy, “Proxy Access” is Now Market Standard

(New York, NY) – More than 600 U.S. companies – including more than 70 percent of the S&P 500 – have enacted rules which give large, long-term investors the ability to nominate directors to companies’ boards, according to the New York City Retirement Systems’ 2019 Post-Season Report released today by New York City Comptroller Scott M. Stringer. The report also highlights other shareowner initiatives over the last year, including work on gender pay equity.

“Just five years ago, we launched a nationwide campaign that challenged the status quo of director elections in corporate America. Today, we continue to build on the progress we’ve made as investors. At hundreds of the largest U.S. companies, we have a meaningful voice to ensure that boards are diverse, climate-competent, independent, and accountable,” said New York City Comptroller Scott M. Stringer. “Diversity and inclusion aren’t mere buzzwords — they must be an airtight commitment in corporate America. Increasing diversity and inclusion is key for businesses to compete successfully in the 21^st century economy. While we’ve made significant progress towards achieving greater accountability and transparency, there’s more to do. We’re working every day to protect the retirement funds that hundreds of thousands of hardworking New Yorkers depend on.”

The New York City Retirement Systems’ “Post-Season Report” provides an overview of shareowner initiatives by the New York City Retirement Systems in 2019.

Highlights from the Post-Season Report include:

The Boardroom Accountability Project and Proxy Access

Proxy Access is the ability of large, long-term investors to nominate board directors on a company’s ballot. In 2010, the SEC enacted a universal proxy access rule, which was subsequently challenged in court and overturned on technical grounds. In response, Comptroller Stringer and the New York City Retirement Systems launched the Boardroom Accountability Project in 2014 to bring this right to the U.S. market, company by company. Firms were targeted if they had little or no board diversity, excessive CEO pay, or substantial exposure to risks related to climate change, such as a reliance on carbon-intensive business practices.

• The New York City Retirement Systems submitted proposals requesting proxy access to 25 companies for the 2019 proxy season.
• 22 companies responded to these proposals by enacting meaningful proxy access.
• In 2014, only six U.S. companies had meaningful proxy access. Now, more than 600 do — including more than 70 percent of the S&P 500.
• One-third of these companies took action in response to a shareowner proposal from the New York City Retirement Systems.

In October 2019, Comptroller Stringer launched the third stage of the Boardroom Accountability Project with a new first-in-the-nation initiative calling on companies to adopt a policy requiring the consideration of both women and people of color for every open board seat and for CEO appointments, a version of the “Rooney Rule” pioneered by the National Football League (NFL).

Gender Pay Equity

In 2019, ten of 11 major healthcare and insurance companies targeted by the New York City Retirement Systems agreed to disclose information on how they address gender pay equity. Nationwide, women earn about 78 cents for every dollar earned by men, with the highest gender pay gaps (33% higher on average across the country) occurring in the healthcare and insurance industries.

Accordingly, the New York City Retirement Systems submitted proposals requesting that companies disclose whether they have a gender pay gap and, if so, to outline the steps they are taking to assess the gap and provide opportunities for the advancement of women. Responsible companies generally made the case that their analyses showed no significant gender pay gap, and that they have policies and programs to address such a gap, if one is found. Some also revealed no gap based on race and ethnicity.

The report also highlights other shareowner efforts over the last year, including work on disclosure of quantitative greenhouse gas reduction goals, calling for executive compensation misconduct clawback policies, and requesting an independent board chair at scandal-plagued Facebook.

Read the full report here.

Comptroller Stringer serves as the investment advisor to, and custodian and a trustee of, the New York City Retirement Systems. The New York City Retirement Systems 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 Retirement Systems’ trustees are:

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

Teachers’ Retirement System (TRS): Mayor Bill de Blasio’s Appointee, John Adler; Chancellor’s Representative, Lindsey Oates, New York City Department of Education; Natalie Green Giles;  and Debra Penny (Chair), Thomas Brown and David Kazansky, all of the United Federation of Teachers.

New York City Police Pension Fund (PPF): Mayor Bill de Blasio’s Representative, John Adler; New York City Finance Commissioner Jacques Jiha; New York City Police Commissioner Dermot F. Shea (Chair); Roy T. Richter, Captains Endowment Association; Louis Turco, Lieutenants Benevolent Association; Edward D. Mullins, Sergeants Benevolent Association; Michael Palladino, Detectives Endowment Association; and, Patrick Lynch, John Puglissi, Joseph Alejandro, and Anthony Cacioppo all of the Patrolmen’s Benevolent Association.

New York City Fire Pension Fund (Fire): Mayor Bill de Blasio’s Representative, John Adler; New York City Fire Commissioner Daniel A. Nigro (Chair); New York City Finance Commissioner Jacques Jiha;  Gerard Fitzgerald, President, Robert Eustace, Vice President, Edward Brown, Treasurer, and John Kelly, Brooklyn Representative and Chair, Uniformed Firefighters Association of Greater New York; Liam Guilfoyle, Captains’ Rep.; Paul Mannix, Chiefs’ Rep., and Jack Kielty, Lieutenants’ Rep., Uniformed Fire Officers Association; and, Peter Devita, Marine Engineers Association.

Board of Education Retirement System (BERS): Schools Chancellor Richard Carranza; Mayoral: Isaac Carmignami, Natalie Green Giles, Vanessa Leung, Gary Linnen, Lori Podvesker, Shannon Waite, Miguelina Zorilla-Aristy; Michael Kraft (Manhattan BP), Debrorah Dillingham (Queens BP), April Chapman (Brooklyn BP), Geneal Chacon (Bronx BP) and Peter Calandrella (Staten Island BP); and employee members John Maderich of the IUOE Local 891 and Donald Nesbit of District Council 37, Local 372

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