Giant US pension funds weigh into BP AGM protest

BP, the oil giant, is facing an increasingly bloody nose from shareholders at its annual general meeting on Thursday this week after two giant US pension funds with combined assets of $380bn (€263.5bn) joined a protest to vote down its annual report and accounts in the wake of the Deepwater Horizon oil spill in the Gulf of Mexico last year. The $235bn California Public Employees’ Pension System (CalPERS), the largest US pension fund and a bellwether of corporate governance, and the $145bn Florida State Board of Administration (SBA), both said they would vote against the company over a lack of response to safety and environmental concerns post-Deepwater.
The decisions follow the announcement last week by a coalition of institutional investors from the US and Europe, including a number of the world’s largest religious funds, that they would vote en masse against the report and accounts. CalPERS said it was concerned with an absence of information in the report related to “key performance indicators and re-evaluation of the board’s role in oversight of risk management”. BP’s AGM takes place in London, just ahead of the April 20 anniversary of the disaster that killed 11 and triggered the worst oil spill in US history. It is expected to be a fractious affair with US investors flying over to register their anger at company management.CalPERS and the SBA say they have specifically voted against the reappointment of director nominee, Sir William Castell, with CalPERS citing “his role as chair of the Safety, Ethics and Environmental Assurance Committee in the period running up to the Gulf of Mexico disaster”.
Last month one of the largest shareholder voting advisory firms, Glass, Lewis & Co., advised its clients to vote against the report and accounts, the top item on the AGM agenda, while rival ISS suggested that its clients abstain from approving the company’s remuneration report.
Glass Lewis also recommended voting against members of the oil major’s safety and ethics committee.
US religious giant, Christian Brothers Investment Services (CBIS), which runs $4bn for Catholic institutions, is leading the investor coalition, which includes the UK’s Ecumenical Council for Corporate Responsibility, whose members control or advise on over £17bn in assets, and Switzerland’s Ethos Foundation, which looks after more than CHF2.3bn (€1.4bn) in assets for more than 100 pension funds and foundations.