US - The California State Teachers' Retirement System (CalSTRS) withdrew 21 of 28 shareholder proposals filed during the 2010 proxy season after successfully engaging companies to make corporate governance changes.
As the lead or co-filer of the proposals, CalSTRS sought declassification of the board of directors, increased board diversity, the appointment of independent chairmen, and sustainability reports on environmental, social and governance (ESG) issues and "poison pill" certification by shareholders, the fund said.
A poison pill is anti-takeover tactic in which warrants are issued to a firm's stockholders, giving them the right to purchase shares at a bargain price in the event of a hostile takeover.
In the majority of cases, CalSTRS engagement efforts resulted in progress on corporate governance matters and improved corporate performance.
"We prefer to engage companies in discussions on these matters rather than go through with shareholder proposals," said Anne Sheehan, corporate governance director at CalSTRS. "If engagement leads to substantial progress on the issue, we withdraw the proposal."
CalSTRS submitted nine proposals on board diversity, with all but one being withdrawn after the companies amended their governing documents.
The $134.3bn fund submitted six proposals on environmental matters, with four ultimately withdrawn as companies agreed to improve their climate risk management disclosure efforts or agreed to prepare sustainability reports.
Seven CalSTRS resolutions went to a vote at annual corporate meetings during the 2010 proxy season, it added. A resolution to ratify poison pills at Ball Corporation passed with 70.2%, and a proposal to declassify the board at Precision Castparts Corp. passed with more than 67%.
Votes on executive compensation at Waddell & Reed Financial, climate-related proposals at Chesapeake Energy Corporation and ConocoPhillips and reimbursement of nomination expenses at Forest Laboratories did not pass but received considerable shareholder support, it said. The fund added it continues to work with the companies on these issues.
The 100 largest global pension funds are widely ignoring climate-related risks despite recent warnings by UN scientists, the Asset Owners Disclosure Project (AODP) says.
Premier Inn owner Whitbread has cut its defined benefit (DB) pension deficit to £162m ahead of its agreed £3.9bn sale of Costa Coffee to Coca-Cola.
Trends in longevity and mortality have proven difficult to forecast historically, but are vital to funding schemes and ensuring adequate retirement pots. James Phillips explores the key influences
The two-sided simplified annual pensions statement should be applauded, even if it missing information, says Jonathan Stapleton.