Comptroller Stringer, NYC Funds: After Three Years of Advocacy, “Proxy Access” Now Close to a Market Standard
January 30, 2018
Number of companies with meaningful proxy access has grown 7,200% in just three years
70% of major healthcare and insurance companies targeted by NYC funds agreed to disclose gender pay equity
NYC Funds’ 2017 Post-Season Report includes updates on proxy access, climate change risk reporting, and other shareowner initiatives
(New York, NY) — More than 440 U.S. companies—including more than 60 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 Pension Funds’ 2017 Post-Season Report released today by New York City Comptroller Scott M. Stringer.
Proxy access, which is the right of large, long-term shareowners to nominate corporate board candidates on a company’s ballot, gives investors a meaningful voice in director elections. After three years of company-by-company advocacy by Comptroller Stringer and the New York City Pension Funds, proxy access is firmly established as a market standard. Today’s report also highlights other significant shareowner efforts over the last year, including crucial work on gender pay equity and disclosure of political spending.
“Just three years ago, we launched a nationwide campaign to change the rules of the road for director elections. Today, for the first time, investors in hundreds of the largest U.S. companies have a meaningful voice to ensure that boards are diverse, climate-competent, independent and accountable,” said New York City Comptroller Scott M. Stringer. “Diversity isn’t just about checking boxes, it must be a living, breathing commitment. It’s also necessary for businesses to succeed in the 21st century, and that matters to long-term shareowners. The 700,000 police officers, firefighters, and teachers are counting on us to protect their retirement – and this is one way we’re delivering. We’re making real progress, but there’s still much work to be done.”
The New York City Pension Funds’ “Post-Season Report” provides an overview of shareowner initiatives by the New York City Pension Funds in 2017, including the pioneering Boardroom Accountability Project, which is now entering its second phase.
Highlights from post-season report include:
The Boardroom Accountability Project/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 Pension Funds 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 NYC Funds submitted proposals requesting proxy access to 71 companies for the 2017 proxy season.
- 51 companies responded to these proposals by enacting meaningful proxy access.
- In 2014, only six U.S. companies had meaningful proxy access. Now, more than 440 do—including more than 60 percent of the S&P 500.
- Nearly one-third of these companies took action in response to a shareholder proposal from the NYC funds.
Promoting Gender Pay Equity
In response to a new initiative launched in 2017, seven of 10 major healthcare and insurance companies targeted by the NYC Funds agreed to disclose information on how they address gender pay equity. Nationwide, women earn about 80.5 cents for every dollar earned by men.
Accordingly, the NYC Funds submitted proposals requesting that companies disclose whether they have a gender pay gap and, if so, to outline the steps they are undertaking 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 addresses 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 political spending, calling for new board leadership at scandal-plagued Wells Fargo, and challenging excessive CEO pay at EpiPen-maker Mylan.
Read the full report here.
Comptroller Stringer serves as the investment advisor to, and custodian and a trustee of, the New York City Pension Funds. The New York City Pension Funds 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 Pension Funds’ trustees are:
New York City Employees’ Retirement System: Mayor Bill de Blasio’s Representative, John Adler (Chair); New York City Public Advocate Letitia James; Borough Presidents: Gale Brewer (Manhattan), Melinda Katz (Queens), Eric Adams (Brooklyn), James Oddo (Staten Island), and Ruben Diaz, Jr. (Bronx); Henry Garrido , Executive Director, District Council 37, AFSCME; John Samuelsen, President Transport Workers Union Local 100; Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.
Teachers’ Retirement System: Mayor Bill de Blasio’s Appointee, John Adler; Chancellor’s Representative, Raymond Orlando, New York City Department of Education; and Debra Penny, Thomas Brown and David Kazansky, all of the United Federation of Teachers.
New York City Police Pension Fund: Mayor Bill de Blasio’s Representative, John Adler; New York City Finance Commissioner Jacques Jiha; New York City Police Commissioner James P. O’Neill (Chair); Patrick Lynch, Patrolmen’s Benevolent Association; Michael Palladino, Detectives Endowment Association; Edward D. Mullins, Sergeants Benevolent Association; Louis Turco, Lieutenants Benevolent Association; and, Roy T. Richter, Captains Endowment Association.
New York City Fire Department Pension Fund: Mayor Bill de Blasio’s Representative, John Adler; New York City Fire Commissioner Daniel A. Nigro (Chair); New York City Finance Commissioner Jacques Jiha; James Slevin, President, Gerard Fitzgerald, Vice President, Edward Brown, Treasurer, and John Kelly, Brooklyn Representative and Chair, Uniformed Firefighters Association of Greater New York; John Farina, Captains’ Rep.; Paul Ferro, Chiefs’ Rep., and Jack Kielty, Lieutenants’ Rep., Uniformed Fire Officers Association; and, Thomas Phelan, Marine Engineers Association.
Board of Education Retirement System: Schools Chancellor Carmen Fariña; Mayoral: Issac Carmignami, T. Elzora Cleveland, Vanessa Leung, Gary Linnen, Lori Podvesker, Stephanie Soto, Benjamin Shuldiner, Miguelina Zorilla-Aristy; Michael Kraft (Manhattan BP), Debra Dillingham (Queens 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.