US - Marsh & McLennan reacted angrily to the decision by four large pension funds to use a shareholder resolution to change its board, declaring they were "surprised and disappointed."
Four large pension funds including CalPERS and CalSTERS announced that were using an anticipated Securities and Exchange Commission rule to nominate and elect better leadership on Putnam's parent company board. The pension funds hold around 1.3% in the company.
Sean Harrigan (pictured), president of CalPERS said: Shareholders do not have any interest in using the proxy statement process to nominate a director unless the problems are so severe they are Enron-esque. Putnam and Marsh & McLennan's problems are in that category,
William L. Rosoff, senior vice president, Marsh & McLennan Companies responded sharply: “We were surprised and disappointed that serious investors concerned with corporate governance would communicate their opinions through a press release and not directly to our management and Board.
“Moreover, any sense of objectivity is undermined by your outrageous reference to Enron in your characterization of what has occurred at our Putnam Investments subsidiary.”
He added: “We would have hoped that major, experienced long-term investors would proceed in a manner that serves the interests of all Marsh & McLennan shareholders.
Harrigan said that lack of independence and excessive compensation were also reasons for filing the proposal, adding: The excessive compensation received by and promised to Lawrence Lasser is outrageous.”
Lasser was fired as Putnam's CEO and removed from the Marsh & McLennan board, but may collect an estimated $89 million in severance.
This tells all of us that this board is more concerned about its friends than its owners, Harrigan said.
Gerald W. McEntee, AFSCME Employees Pension Plan Chairman said: It is tragic that the board at Marsh & McLennan lacked the independence needed, and today continues to be influenced more by its insiders than the needs of its shareholders.
“There is no question that shareholders will support the idea of electing a truly independent director to the board if given the opportunity through our shareholder resolution.
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