GLOBAL - Two US pension funds have deployed ‘war tactics' in a bid to force American firm Halliburton to disclose its links with Iran.
In what has been viewed as a significant victory for the New York City Police and Fire Pension Funds’ corporate governance initiative, Halliburton has agreed to establish a board of directors' committee to review its operations in Iran. The decision came just days after the SEC refused to state that it would take no action against Halliburton if the company omitted the pension fund proposal from its 2003 proxy materials.
New York City Comptroller William Thompson, who is responsible for New York City’s five independent primary pension funds, submitted the proposal on behalf of the police and fire pension funds in Q4 2002.
In February 2000, Halliburton opened an office in Iran under the name Halliburton Products and Services, its Cayman Islands subsidiary.
“The Iranian government has actively supported and funded terrorist operations against innocent civilians outside its own borders,” the resolution read.
“These activities led to the imposition of government sanctions that provide that virtually all trade and investment activity with Iran by US corporations is prohibited.”
Following the SEC’s decision, Halliburton will have had to put the resolution before shareholders at its 21 May meeting and the Comptroller's Office has recommended that the funds now withdraw the resolution.
“I am pleased that Halliburton has agreed to review its offshore operations,” Thompson said.
“In the current global climate, it is important that shareholders have full and complete confidence that companies with which they do business are not, in any indirect way, supporting terrorists.” The two New York pension funds, which have more than $18m in holdings in Halliburton, submitted similar resolutions with Conoco-Phillips and the General Electric Company.
General Electric conducts business operations with the Iranian government through its Canadian subsidiary, General Electric Hydro. ConocoPhillips has operations in Iran and Syria through its UK subsidiary, Conoco.
The two funds have more than $31m in holdings in ConocoPhillips, and $205m in General Electric. Talks have been scheduled between the funds and ConocoPhillips, although the company has requested that the SEC block the funds' resolution for this year's proxy season. General Electric plans to include it in its proxy at this year's shareholder's meeting.
*Earlier this year, the Montana Board of Investments sold all its shares in French companies as a reaction to the French position on the war in Iraq.
On 13 March the Board voted five to four to sell all French company stock in its internally managed European investment portfolio.
“The majority of the Board was concerned that the antagonism between France and the US on the UN Security Council could result in a backlash or boycott against French company products and services that could detrimentally impact the price of the shares,” said Carroll South, executive director of the Montana Board of Investments.
At 31 January 2003, the portfolio included shares in eight French companies with a total book value of $15.2m, including holdings in TotalFinaElf, BNP Paribas, Air Liquide and Alstom. All the stocks were sold by 10 April. The Board’s total portfolio is worth $8.6bn, $4.8bn of which is pension fund assets.
The Board retains investments in French companies which form part of external funds.
At 31 January 2003, the external manager’s portfolio included six French companies with a total book value of $14.9m.
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.