The $235.8bn (€170.5bn) California Public Employees’ Retirement System (CalPERS), the largest US public pension fund, will back an innovative floor resolution calling for a separate CEO/Chairman at media giant News Corp.
The giant fund will attend the company’s annual general meeting in Los Angeles on Friday to cast its vote in support of the resolution, being brought by Christian Brothers Investment Services’ (CBIS).
“We believe if the Chairman is independent, the board may be able to exercise stronger oversight of management,” CalPERS says.
The influential investor – which owns about 1.45m News Corp. shares, noted that it wants to “rejuvenate” the board with independent directors. It would continue to engage with the company on the issue.
Floor resolutions, which have gained traction with investors in the US recently, require the physical attendance of shareholders. It’s a technique that has been pioneered by Tim Smith, Senior Vice President at Walden Asset Management, in engagements with a range of companies such as 3M Co., ConocoPhillips, CVS Caremark, Eastman Kodak, JPMorgan Chase and Pfizer.Julie Tanner, Assistant Director of Socially Responsible Investing at CBIS, is going to Los Angeles to present the resolution in person at what is the first opportunity for investors to formally register their views about the running of the company following the phone hacking scandal. The resolution appears in one line at the bottom of the proxy and is easily overlooked.
CalPERS also said it would withhold its votes for the company’s founder Rupert Murdoch and his sons James and Lachlan as well as Arthur Siskind and Andrew Knight. It said the company’s dual class voting structure meant independent board leadership must be emphasized to protect minority shareholders.
CalPERS added it would vote against the company’s executive compensation proposal – warranted as the firm “has not adequately tied pay with performance”. CalPERS has joined its fellow California pension giant CalSTRS, which is also opposing News Corp. directors. There has been a barrage of opposition ahead of what could be a bruising AGM on October 21, from proxy advisory firms ISS, Glass Lewis and PIRC and from investor groups Hermes Equity Ownership Services the Local Authority Pension Fund Forum and the Australian Council of Superannuation Investors.