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Norwegian pension fund drums up support for US governance campaign

Investor presentations on ‘proxy access’ proposals

Norges Bank Investment Management, the manager of the giant NOK3.5trn (€460bn) Norwegian Government Pension Fund, is drumming up shareholder support for its campaign on director elections at US corporations.

NBIM announced late last year that it had filed proposals at the companies seeking the right to nominate director candidates – known as ‘proxy access’.

The companies under scrutiny are Wells Fargo, Staples, Western Union, CME Group and Charles Schwab.

Now, via a Securities and Exchange Commission filing, the fund has released a 31-page PowerPoint presentation to fellow investors which outlines its concerns about the governance failings at the target companies.

For example, it has five major issues at banking group Wells Fargo.
These included the fact that the board has circumvented a shareholder proposal by implementing a 25% capital requirement to call an extraordinary general meeting, in contradiction to a 2011 shareholder proposal with a 10% threshold. Another is that the board may amend bylaws without shareholder approval.Another issue highlighted is the combined roles of CEO and Chairman. Similar analysis is provided for the other companies.

“Proxy access will lower our US investment risk,” Norges argues in the presentation, adding that the proposals are necessary “in the absence of a universal rule.” NBIM has $108bn, or 18% of its assets, invested in US companies.

“Proxy access will lower our US investment risk”

The presentation, by NBIM’s Runa Urheim, Senior Corporate Governance Analyst, and Vegard Torsnes, Senior Analyst, Ownership Strategies, is available here.

The companies are advising their shareholders to vote against NBIM’s proposals.

Charles Schwab holds its AGM in San Francisco on May 17. The CME Group and Western Union hold their AGMs in Chicago and New York on May 23 while Wells Fargo holds its meeting in San Francisco a day later. Staples’ AGM is in Toronto on June 4.