New York’s Stringer builds on ‘proxy access’ campaign with 72 new proposals

The latest developments in the Boardroom Accountability Project

Building on his successful campaign around shareholder rights, New York City Comptroller Scott Stringer has today (January 11) announced that the New York City Pension Funds – with combined assets of $162bn – that he oversees have filed 72 proxy access proposals with focus on holdings with coal-intensive utilities, board diversity laggards and companies with excessive CEO pay.

It follows a game-changing 2015 for Stringer’s Boardroom Accountability Project that has resulted in the number of companies with proxy access bylaws increasing from six in November 2014 to 115 today.

Proxy access, as defined by BAP, gives shareholders the right to nominate their own board candidates for one-quarter of the board if they hold 3% of the company’s stock for at least three years.

And today the NYC Pension funds have filed proposals on proxy access at 72 companies including, the Colgate-Palmolive Company, Fidelity National Financial and Netflix. The list includes 36 companies from its 2015 focus list that have not yet agreed on meaningful proxy access.

Comptroller Stringer said: “In 2015, investors finally broke through corporate America’s decade-long opposition to proxy access…. the best way to ensure we have the right people on those boards, those who are independent, diverse and accountable, is through proxy access.This reform gives investors a seat at the table and ensure that boards are responsive to the concerns of its shareowners.”

Speaking to Responsible Investor on the success of the BAP campaign that was supported by a coalition of investors with more than $1trn in assets under management, Tim Smith, Director of Environmental, Social & Governance Shareowner Engagement at Walden Asset Management, said the campaign had strong support form CalSTRS, who lobbied publicly on its behalf. He also said top companies supported it behind the scenes and it had public support. “But, there was pushback from the Chamber of Commerce,” he said.

This month, CalSTRS, which manages $188bn in assets making it one of the world’s largest asset owners, said it had written to 30 larges US companies asking them to adopt proxy access.

Walden’s Smith also said that the proxy access bylaw as defined by BAP would be very hard to implement in practice. “Companies know it’s not a slam-dunk,” he said. “They see it as protecting their interests and a reasonable and fair approach for long term investors. It is a respectful acknowledge of the needs of long term investors.”

He added that some investors didn’t want the 3% figure, but 5%: “Some investors didn’t like this formula, “ he said. “But remarkably it’s stuck.”