PGGM says supporting Oracle board at AGM was not in beneficiaries’ interest

Investor doesn’t take decision to oppose board lightly

Dutch pension asset manager PGGM Investments says it withheld support for the entire board at software firm Oracle’s annual meeting yesterday (October 31) because of the interests of its beneficiaries.

PGGM, which manages €140bn on behalf of five pension funds, said opposing the re-election of all directors on a board was not a decision it takes lightly, “however, we feel that there is a lack of proper board accountability at Oracle”.

“As a result, we believe that it is not in our beneficiaries’ interests that any of these director nominees continue to serve on the board.”

In a rare open letter to fellow shareholders ahead of the meeting, PGGM had teamed up with California-based CalSTRS and RPMI Railpen Investments of the UK to say they would vote against the board over pay.

Explaining its vote, PGGM said: “As there have been no substantial changes to compensation structure, it is our opinion that the Board of our company is failing in its duties to shareholders by continuing to endorse a pay structure that a majority of shareholders do not support.”The AGM was characterized by a shareholder revolt over pay and, according to voting records, investors including the likes of the giant Norges Bank Investment Management (NBIM), the Ontario Teachers Pension Plan (OTPP) and the Florida State Board of Administration voted against ratifying executives’ compensation.

OTPP said on its voting disclosure page: “We continue to express significant concerns with the compensation plan, most notably the persistent lack of alignment between pay and performance. As such, we are unable to support the Say-on-Pay proposal at this time.”

NBIM withheld its vote for eight directors, though it did back founder and CEO Larry Ellison.

According to media reports citing initial vote tallies, a majority of shareholders opposed pay at the company though Oracle has yet to release precise numbers.
CtW Investment Group, which advises union pension funds, had advised investors to reject the pay report and the directors on the compensation committee. CtW estimated that, excluding Ellison’s shares, almost 85% of shares voted against pay, according to a Reuters report.