Norwegian pension giant makes progress in director nominations campaign

Reaches compromise at Western Union after engagement

Norges Bank Investment Management (NBIM), the arm of the Norwegian central bank which manages the NOK4.1trn (€550bn) Government Pension Fund, has had some success in its campaign on director nominations in the US.

It launched the effort last year to persuade several leading corporations to let shareholders have the right to nominate director candidates, known in the jargon as ‘proxy access’. Equal treatment of shareholders and shareholder influence and board accountability are two of the fund’s six strategic focus areas.

It filed proposals at a range of firms including broking firm Charles Schwab, banking giant Wells Fargo, exchange operator CME Group and money transfer group Western Union. Its idea was that investors with a 1% stake, held for one year, should be allowed to nominate directors.

Now it’s emerged that Norges has withdrawn the proposal at Western Union following discussions with the company. Western Union will now allow shareholders with a 3% stake held over three years to nominate candidates. The company had previously argued that only investors with a 5% stake over three years could do this. Norges says it still believes the 1% threshold is more appropriate but says Western Union’s decision is a “significant step in the right direction”.It comes as the largest US pension fund, the California Public Employees Retirement System (CalPERS), has welcomed the resignation of Hewlett-Packard Chairman Raymond Lane and directors John Hammergren and Kennedy Thompson.

CalPERS and other investors had engaged the tech giant after what the California fund giant terms a series of disastrous acquisitions – and made their feelings known at the company’s annual meeting last month.

“It is time to move beyond the recent failures at HP and bring fresh talent to the boardroom. HP needs a Board which is unencumbered, and will provide rigorous oversight of all decisions, including reviewing the auditor,” said CalPERS’ Director of Corporate Governance Anne Simpson.

Meanwhile, Norges has been adjusting its stake in troubled LED and solar technology company Veeco Instruments.

NBIM yesterday disclosed that it has a 4.77% stake in the firm, which is currently not in compliance with Nasdaq listing rules over late filings. This follows accounting irregularities relating to the timing of when it books revenue. The stake is down from a 5.03% holding reported on March 21. The giant fund had built that up from 4.02% disclosed earlier.

Plainview, New York-based Veeco is currently listed as “delinquent” under Nasdaq’s issuer rating system for missing filing deadlines.