CtW Investment Group, the active ownership group linked to US labour union pension funds, is seeking greater shareholder say in the running of drugstore chain Walgreens.
It has filed a shareholder motion on so-called “proxy access” to allow investors in the Illinois-based company to vote on directors nominated by shareholders. The proposal is currently being considered by the Securities and Exchange Commission.
The proposal specifies that the number of shareholder-nominated candidates shall not exceed 20% of the board and that nominating investors should have owned at least 3% of the company’s shares for at least three years.
The company is resisting the proposed motion saying it is open to “multiple interpretations” but CtW says a similar proposal was proposed by Hewlett-Packard’s board and “overwhelmingly adopted” by the tech firm’s shareholders at its AGM earlier this year.
“We believe long-term Walgreens owners should have a more meaningful voice in nominating and electing directors,” CtW says in a supporting statement that forms part of CtW Executive Director Dieter Waizenegger’s correspondence with Walgreen Corporate Secretary Thomas Sabatino.
CtW works with pension funds sponsored by unions affiliated with union federation Change to Win, which represents nearly 5.5m workers and more than $200bn in assets.Walgreens intends to file its 2014 annual meeting agenda in November ahead of the meeting, which is likely to take place in January.
“Long-term Walgreens owners should have a more meaningful voice in nominating directors”
Earlier, CtW wrote to pharmaceutical wholesaler McKesson calling for the resignation of the company’s Compensation Committee Chairman Alton Kirby and the reduction of CEO John Hammergren’s $159m pension pot.
It came in the wake of what CtW called “unprecedented” votes against the board’s executive pay practices at the AGM. CtW offered its assistance to the company in responding to shareholder demands for change at the company.
Meanwhile, CtW has written to software giant Oracle’s seeking a change to its “top heavy” pay culture. In the letter to board compensation committee chairman Bruce Chizen CtW said threatened to vote against Oracle’s pay plan and compensation committee members at its annual meeting set for October 31.