Ontario teachers pension fund sells 20% stake in proxy firm Glass Lewis

Fellow Canadian investment giant AIMCo is new shareholder

US proxy voting firm Glass Lewis, which has been wholly owned by the C$125bn (€89.7bn) Ontario Teachers’ Pension Plan (OTPP) since 2007, has gained a new shareholder.

OTPP said Wednesday that it had sold a 20% stake in Glass Lewis to the Alberta Investment Management Corporation (AIMCo). Financial details were not disclosed. Founded in early 2008 by the Alberta government, AIMCo runs the assets of 27 pension, endowment and government funds in the province. It has C$70bn under management.

“While we remain committed to maintaining a long-term stake in Glass Lewis, we believe diversifying the firm’s ownership with like-minded investors will bring valuable perspectives to the next stages of Glass Lewis’ development,” said Wayne Kozun, senior vice president of public equities at OTPP, in a statement. “We look forward to working with AIMCo, a long-time advocate for improved corporate governance.”

AIMCo is a signatory to both the UN-backed Principles for Responsible Investment (PRI) and the CDP, the former Carbon Disclosure Project. It also has been a member of the Canadian Coalition of Good Governance since 2008.Glass Lewis, along with MSCI-owned Institutional Shareholder Services (ISS), is one of the most prominent firms advising shareholders how to vote at company annual meetings. The San Francisco-based company was founded in 2003 by Kevin Cameron and Gregory Taxin and its clients manage a collective $15trn.

Since OTPP acquired Glass Lewis from Xinhua Finance almost six years ago in a US$46m deal, there has been criticism over potential conflicts of interest given that it supplies advice to its owner.

In June 2012, for example, the US Chamber of Commerce questioned whether its voting advice ahead of a contested annual general meeting at Canadian Pacific Railways was influenced by OTPP. The proxy firm denied this was the case, noting that its recommendations and OTPP’s votes were not the same. The Chamber remained unconvinced, saying that the Canadian Pacific Railways case showed that the system “was out of whack”.

Glass Lewis maintains that while OTPP and AIMCo are among its clients, neither is involved in its daily management and that they aren’t involved in formulating policies or making specific voting recommendations.