The Shareholder Rights Project (SRP) and each of eight institutional investors it represents announced their collaboration for the 2013 proxy season to encourage 74 S&P 500 and Fortune 500 public companies to move to annual elections.
The SRP has submitted shareholder proposals on behalf of the eight SRP-represented investors for a vote at the 2013 annual meetings of 74 S&P 500 and Fortune 500 companies. A list of the 74 companies that received proposals is available here. The proposals urge repeal of the companies’ staggered boards and a move to annual elections. Good to know, so that I and others don’t file similar proposals at the same companies.
The SRP and SRP-represented investors have already begun to engage with companies receiving shareholder declassification proposals, and some of the companies receiving shareholder proposals have already agreed to take steps necessary to declassify their boards. It is expected that, as occurred during the 2012 proxy season, the engagement by the SRP and SRP-represented investors will result in negotiated outcomes and moves to annual elections at a large proportion of the 74 companies receiving proposals.
The 2012 work by the SRP and SRP-represented investors led to 48 S&P companies entering into agreements to bring management proposals to declassify; 31 boards of S&P 500 companies have already declassified following such agreements. The 2012 work by the SRP and SRP-represented investors has also led to 38 successful precatory proposals at S&P 500 companies, with average support exceeding 80%. A full description of the 2012 activities and their results will be provided in the forthcoming 2012 annual report of the SRP.
A move to annual elections, which are widely viewed as corporate governance best practice, could make directors more accountable and thereby contribute to improving performance and increasing firm value. The benefits of proposals enabling shareholders to register their support for declassification are described in a New York Times DealBook column, entitled Giving Shareholders a Voice, by SRP director Lucian Bebchuk.
The eight institutional investors serve more than three million members and manage assets with a total value of more than $400 billion. Additional information about each of the SRP-represented investors is available here.
The media releases by the SRP and each of the eight SRP-represented investors are available at the following links:
- Joint press release by the Florida State Board of Administration and the SRP
- Joint press release by the Illinois State Board of Investments and the SRP
- Joint press release by the Los Angeles County Employees Retirement Association and the SRP
- Joint press release by the Massachusetts Pension Reserves Investment Management Board and the SRP
- Joint press release by the Nathan Cummings Foundation and the SRP
- Joint press release by the North Carolina Department of State Treasurer and the SRP
- Joint press release by the Ohio Public Employees Retirement System and the SRP
- Joint press release by the School Employees Retirement System of Ohio and the SRP
The Shareholder Rights Project (SRP) is a clinical program at Harvard Law School. The SRP works on behalf of public pension funds and charitable organizations seeking to improve corporate governance at publicly traded companies in which they are shareowners, as well as on research and policy projects related to corporate governance. Any views expressed and positions taken by the SRP and its representatives should be attributed solely to the SRP and not to Harvard Law School or Harvard University.
The SRP is one of the most important developments in many years. I hope they will expand their initiatives beyond the low hanging fruit of declassifying boards. For example, if they took up proxy access in a form that would empower retail shareowners, that would be awesome. Stanford? Columbia? University of San Diego? Let me know which university may be next and why.