CalPERS 2010 Majority Vote Initiative Successful At Top Companie

The California Public Employees’ Retirement System (CalPERS) has achieved positive results in connection with the 2010 Majority Vote Initiative the System embarked on last spring.

CalPERS initially had asked 58 U.S. companies to voluntarily adopt a majority vote rule in place of a plurality policy that allows candidates for uncontested board seats to be elected with a single “for” vote. In plurality voting, shareowners can oppose candidates by casting “withhold” votes, but that option gives them no voice in the meeting outcome.

The proposed majority vote policy backed by CalPERS would require the resignation of any director who receives a withhold vote greater than 50 percent of the votes cast.

“Too often board elections are more like a coronation than an election,” said Joseph Dear, CalPERS Chief Investment Officer. “The majority vote is an effective tool for holding directors accountable for creating shareowner value and encouraging better shareowner-director communication.”

To date, 20 of the 58 companies that CalPERS identified on the issue have implemented or have publicly committed to adopting the majority vote standard.  CalPERS plans to file shareowner proposals for majority vote at Annaly Capital Management, Apple Inc., BB&T Corp., and V.F. Corporation. CalPERS will continue engaging the remaining 34 companies and file shareowner proposals when necessary.

The 20 companies that have implemented or publicly committed to the adoption of majority vote are Boston Properties Inc.; Cameron International Corp.; CenturyLink Inc.; Computer Sciences Corp.; Consol Energy Inc.; Corning Inc.; Costco Wholesale Corp.; Edison International; Intuit Inc.; Intuitive Surgical Inc.; Johnson Controls Inc.; Life Technologies Corp.; Mastercard Inc.; Omnicom Group; Public Storage; Rockwell Collins Inc.; Southwestern Energy Co.; Symantec Corp.; United Parcel Service Inc.; and Visa Inc.
  
“We applaud these companies for their positive response,” said Anne Simpson, the Senior Portfolio Manager who heads the CalPERS corporate governance program. “They will be joining more than 80 percent of S&P 500 companies and 60 percent of Russell 1000 companies that have adopted some form of policy for director resignations or majority vote standards for director elections.”

For the list of the 58 companies, proxy votes and other corporate governance information, visit www.calpers-governance.org.

CalPERS, with approximately $221 billion in assets, is the nation’s largest public pension fund and administers retirement benefits for more than 1.6 million active and retired State, public school, and local public agency employees and their families. For more information about CalPERS, visit www.calpers.ca.gov.