The New York City Comptroller released its annual Shareholder Initiatives Postseason Report to the Board of Trustees of the New York City pension and retirement funds. The report provides a summary of proxy voting results, shareholder proposals, regulatory engagement efforts and other initiatives for the twelve months ended June 30, 2016. The report is available here, along with an archive of the postseason reports since 2003.
During the 2016 proxy season, the NYC Comptroller’s office voted on 30,326 individual ballot items at 3,658 annual and special meetings of U.S. companies. In total, the NYC Funds supported 90% of shareholder proposals and 77.7% of management proposals.
Touting the success of its Boardroom Accountability Project, the Comptroller cited that 322 U.S. companies had adopted proxy access as of June 30, 2016, up from only 6 companies in 2014 when the Project was launched. The NYC Funds submitted 72 proxy access proposals in 2016 and 75 in 2015, with the Comptroller settling 72% in 2016 (the company agreeing to adopt proxy access), compared to only 8% in 2015. Expanding the scope of target companies, in 2016, the Comptroller submitted proxy access proposals to companies in which it had a large investment – not only, as previously, to companies viewed by the Comptroller as having insufficient board diversity, executive compensation issues, or, in the case of carbon-intensive energy companies, vulnerability to climate change risk. The report includes a complete list of companies that have received a proxy access proposal from the Comptroller, the reason why, and the result.
The report also cites recent engagement on political spending, particularly at companies in the energy industry. At financial services and advertising companies, the Comptroller is focused on submitting proposals seeking annual disclose of workplace diversity data. Other 2016 initiatives highlighted by the Comptroller included:
- “Vote no” campaign at Bed Bath & Beyond challenging CEO pay
- Letter writing campaign prompting executive pay clawbacks at Wells Fargo
- Letter writing campaign calling for an independent chair and oversight and disclosure of drug pricing strategy and risk at Mylan in response to the EpiPen pricing controversy
- Supporting a shareholder proposal requesting that Exxon Mobil report on the impact of its climate change policy
- Letter writing campaign to six companies that reportedly source shrimp from Thailand following reports of labor abuses in Thailand’s shrimp industry; and
- Letter writing campaign to 16 large companies to disclose quantitative performance metrics on their supplier diversity programs.
In April 2016, the NYC Funds adopted and revised, for the first time since 1987, new Corporate Governance Principles and Proxy Voting Guidelines. The new guidelines cover a broad range of corporate governance issues, including board diversity, board oversight of climate risk and human capital management, board tenure, executive compensation, human rights and fair labor practices, and environmental stewardship.