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The California Public Employees’ Retirement System (CalPERS) continued its efforts in 2023 to hold companies it invests in accountable in several critical areas including: director accountability, board independence, executive compensation, and oversight of climate-related risks.
The newly released 2023 Proxy Season Wrap-Up (PDF) provides insight into how CalPERS voted in nearly 32,000 elections. Among the highlights:
- CalPERS support of directors decreased from 67% in 2022 to 58% in 2023 (see Figure 1: Global Director Votes) driven by a sharp decline in support of international directors, while support for United States directors held relatively steady.
- The decrease internationally, from 63% to 52%, was due to CalPERS’ decision to raise its standard for board independence in the Japan market from 33% to 50%.
- CalPERS also increased its votes against executive compensation where pay issues were observed, voted on a record-high number of shareowner proposals in Global Equities, and increased the total of environmental proposals that it supported by nearly 50%.
"CalPERS believes that high-quality corporate boards should be comprised of mostly independent directors and be diverse with an appropriate balance of skills, expertise, and tenure," said Drew Hambly, CalPERS Global Equities Investment Director. "When CalPERS votes against a director in an uncontested election, it is a signal to the board that there is some aspect of governance or board oversight that we believe needs improving."
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