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The California Public Employees’ Retirement System (CalPERS) praised the U.S. House Financial Services Committee today for adopting legislation to help shareowners place their own candidates on proxy ballots in corporate board elections.
An amendment by Reps. Maxine Waters, D-CA, and Gary Peters, D-MI, reaffirms the statutory authority of the U.S. Securities and Exchange Commission (SEC) to give shareowners access to the proxy. The Waters-Peters Amendment to the Investor Protection Act was adopted today on a 39-30 vote.
“This legislative effort strongly led by Rep. Maxine Waters supports the single most powerful thing we can do to improve corporate governance in America’s boardrooms by giving shareowners a way to hold directors more accountable,” said Rob Feckner, CalPERS Board President. “We’re pleased to see this measure included in the bill as it moves through the House this fall and we commend Committee Chairman Barney Frank (D-MA) and all the representatives of California who sit on this Committee for their support.”
Reps. Brad Sherman, Joe Baca, and Jackie Speier also supported CalPERS position on proxy access.
Current rules make it prohibitively expensive for even big investors like CalPERS to nominate board candidates and send out proxy ballots. Proponents say the proxy access amendment to the Investor Protection Act will help forestall costly and time-consuming litigation that is likely in the absence of its clarification of the SEC’s existing statutory authority to adopt proposed regulations on the issue.
In May, the SEC proposed new rules that will allow shareowners to include their director nominees in a company’s proxy materials. Referring to the proposed SEC rule change, George Diehr, Chair of the CalPERS Investment Committee, said:
“This rule change is necessary to avoid election of weak directors that can breed complacent boards. Complacent boards tend to take the path of least resistance to oversight. Without stronger alignment with company owners, directors are reluctant to challenge excessively risky management decisions and lavish pay packages that contributed to the recession.”
CalPERS holds shares in more than 9,000 publicly traded companies and is the nation’s largest public pension fund with $197 billion in market assets. CalPERS administers retirement benefits for more than 1.6 million active and retired State, public school, and local public agency employees and their families on behalf of 2,600 California public employers.
For more information about CalPERS, visit www.calpers.ca.gov. For additional
CalPERS corporate governance information, visit www.calpers-governance.org.
