Three major proxy advisory services have endorsed a majority vote election standard proposed by the California Public Employees’ Retirement System (CalPERS) for unopposed board candidates of Apple Inc.
Egan-Jones Proxy Services, Glass, Lewis & Co. LLC, and ISS Proxy Advisory Services are supporting Proposal 6 by CalPERS at the computer company’s shareowner meeting on February 23 in Cupertino, California. The non-binding proposal asks Apple to replace its plurality vote rule in uncontested elections and to require election by a majority of total shares. The current plurality vote rule allows directors to be elected by a single “for” vote.
“Majority voting empowers shareowners to say ‘no’ to unopposed directors,” Egan-Jones said in its report to shareowners. “The power of majority voting, therefore, is not just to remove underperforming directors, but also to heighten director accountability through potential loss of majority support.”
Glass Lewis said in a similar shareowner report that it analyzed 46 majority vote proposals at annual meetings in the United States in 2009. “These proposals received on average 59 percent shareholder support (based on for and against votes), up from 54 percent in 2008, indicating increased shareholder interest and support for the majority vote standard.”
ISS reported: “The basic premise of majority voting is simple and direct. The current (plurality) board election system is undemocratic in uncontested elections. Directors who run unopposed keep their board seats even when they fail to win majority support. In the U.S., an increasing number of corporate issuers use a majority threshold in boardroom elections, while most non-U.S. markets require shareholders to ratify director nominees by a majority vote.”
The CalPERS shareowner letter is posted on www.calpers-governance.org. CalPERS is the nation’s largest public pension fund with approximately $229 billion in assets. It administers retirement benefits for more than 1.6 million active and retired State, public school and local public employees and their families. For more CalPERS information, visit www.calpers.ca.gov.
FTSE Mondo Visione Exchanges Index:
Proxy Advisors Back CalPERS Majority Vote Bid For Election Of Apple Inc. Board
Date 11/02/2011