Listing standards change sought by the Council of Institutional Investors (CII). CII filed petitions with the New York Stock Exchange (NYSE) and the NASDAQ, asking both to limit listings of companies with dual-class share structures. They have taken the right approach to address a growing problem. I hope it ends a worldwide race to the bottom for listing standards. Alternatively, adoption of the suggested listing standards could reestablish that US based companies are more democratic and accountable than counterparts based elsewhere. Continue Reading →
Tag Archives | CalPERS
CSR investments may someday drive investments at CalPERS. That possibility is many years off but may a get start at the California State Retirees (CSR) Delegate Assembly, held October 22-23 in Sacramento. CSR is smaller than many of the unions representing currently employed public employees in California but our members vote. Continue Reading →
SB 826 requires specified California-based public corporations to include women directors on their board. Sidley Austin LLP put out a bulletin on the topic. To ensure it receives widespread circulation, I am reproducing its main text below, with one minor change to break up an absurdly long sentence. Continue Reading →
The reputations of Marcie Frost and CalPERS are under a cloud, given the circumstances of her hiring, alleged evidence and news reports. See Continue Reading →
“Impact investing” – financial investments designed to generate a measurable, positive impact on society, while also providing potential returns – is growing in popularity, according to new research conducted by American Century Investments. The “appeal” of impact investing reached 49% among 2018 survey participants, compared to 38% in 2016. At 56%, Millennials find impact investing most appealing, followed by Gen Xers and Baby Boomers at 52% and 44%, respectively. Continue Reading →
Keep CalPERS healthy; vote for Flaherman and Brown. Ballots have been mailed out to more than 1.5 million CalPERS members. They must be received by October 2nd to count. This is probably the most important election the $333B+ System has ever held, given how the board isolated and ostracized current director J. J. Jelincic for doing his job. I voted for Michael Flaherman and Margaret Brown. I recommend all members do the same. Take action today.
Questions? Contact [email protected] and [email protected] before and after the election. Flaherman and Brown won’t hide from members once elected. Both have also been endorsed by J. J. Jelincic, the only current board member who routinely asks the tough questions of staff and others on the Board. Continue Reading →
CalPERS muzzles critics. The following editorial appeared in the Sacramento Bee on May 25, 1999. The editorial references a “technical violation of board rules” by then Chairman William Crist. Actually, it was a clear violation of the rules, which prohibited changes to candidate statement after submission. No candidate in the history of CalPERS had ever been allowed to change anything in their statement, not even correct small grammatical errors. With the permission of staff, Mr. Crist was allowed to change his statement to address ethical concerns about him that I had raised in my statement. The election was not overturned because CalPERS rules required proof the results of an illegally conducted election would have been different had the rules not been violated. Proof might be obtained in a case of ballot stuffing but not candidate statement rewriting. How can you prove results would have been different in a fair election?
Addendum to CalPERS muzzles critics. Two of those later named in a bribery scandal also voted to muzzle candidates. (As bribery case continues, CalPERS reaps profits from tainted investments, Sacramento Bee, July 24, 2014.) The growing corruption I alluded to in my campaign was real.
Now I am delighted to learn Michael Flaherman, the only CalPERS director elected by members who stood against the effort by the CalPERS Board to muzzle critics, is running in the upcoming election. See Critic of Wall Street Fees to Leave Calpers Board and my comments in the May 19, 2017 WSJ. If elected, Flaherman will be independent and effective. He has my endorsement, without reservation. Continue Reading →
CalPERS and CalSTRS sponsored the California Diversity Forum in Sacramento (“America’s Most Diverse City”) on Wednesday, May 12, 2017, bringing together investment and corporate executives to discuss how to better capitalize on the abilities of the diverse modern workforce. Diversity is both morally right and profitable. Narrowing the global gender gap would add $12 trillion in annual gross domestic product to global growth (McKinsey Global Institute).
What follows are my cryptic notes from the Diversity Forum. Sometimes they are just phrases I captured that may not mean so much out of context. Maybe it will be just enough to mark your calendar for next year’s Forum. More coverage at Part 1 and on Twitter at #CADiversityForum. I loved the fact that for once, I didn’t have to travel thousands of mile. Nice to have such an event in my own hometown.
Diversity Forum: The Corporate Perspective
CalPERS and CalSTRS sponsored a diversity forum in Sacramento on Wednesday, May 12, 2017. The goal of the Diversity Forum was to bring together investment and corporate executives to discuss how to better capitalize on the abilities of the diverse modern workforce. While I think diversity should be adopted simply because it is morally right, often economics speaks volumes in the finance community. The McKinsey Global Institute estimates that narrowing the global gender gap could add US $12 trillion in annual gross domestic product to global growth.
The Forum focused on:
- Recent research
- Developing and implementing positive, solutions-oriented initiatives and real world best practices
- Insight and experience of industry leaders
Even in Washington, the numbers are impressive. The Council of Institutional Investors, who met in Washington DC this week, represents 23 trillion (with a t) dollars, mostly made up of retirement and other savings of working families. Compare that to the entire budget of the US government, less than two trillion a year. Like most industry group meetings in Washington, this one had presentations on what to expect from Congress and the regulatory agencies and how millennials will change the way the members do business, plus snack breaks and wireless sponsored by firms trying to sell products and services to the attendees. But the a two and a half day session featured repeated agenda topics on climate change and what are called ESG issues, suggesting that pension funds may step in where governments have failed. Continue Reading →
Large institutional investors, concerned about portfolio risks stemming from the effects of global warming, are calling for climate-competent boards and directors as part of their fiduciary responsibility to preserve and enhance the long-term value of their investment assets.
Despite the anticipated rollback of climate related governmental policies such as the Environmental Protection Agency’s Clean Power Plan and limits on methane emissions by the Trump administration, investors still need to understand the risks that climate change poses to their portfolios. Unequivocal disclosures and boards equipped to manage and govern climate risk will be more important than ever. Now, however, it appears investors will not able to rely on federal regulatory standards or policy interventions to manage climate risk related to greenhouse gas emissions and the emphasis on fossil fuel production. They will be left to their devices to understand the very real financial impacts that climate issues could have on their portfolios. Continue Reading →
3D Moves to Equilar. The California State Teachers’ Retirement System (CalSTRS) and the California Public Employees’ Retirement System (CalPERS) today announced the Diverse Director DataSource (3D) will now be available through the Equilar Diversity Network.
The new partnership marks an exciting milestone for the 3D, a database the two pension funds jointly developed in 2011. 3D was designed to make it easy for companies to find untapped talent to serve as directors on corporate boards. 3D joins the suite of searchable sources on Equilar, further simplifying companies’ and candidates’ ability to build and be a part of diverse corporate boards. MSCI ESG Research previously hosted the database.
Launching 3D on Equilar’s Diversity Network showcases the depth and availability of qualified, diverse directors. The Diversity Network is designed to connect candidates from various diversity organizations with boards. Continue Reading →
Tobacco Investments Update
Apparently, CalPERS sent invitations out on 9/27, 10/6 and 10/13 to about 400 people. Although I am on mailing lists for press and rulemaking, I wasn’t on the “stakeholders” mailing list. That has now been corrected going forward.
The webinar was brief. CalPERS Chief Operating Officer Wylie Tollette reviewed CalPERS’ prior tobacco divestment actions, CalPERS’ general investment considerations, the broader implications of divestment, and public policy considerations related to tobacco. View recording of webinar. Download the handout in pdf (review-of-tobacco-investments-restrictions-slide-deck). Continue Reading →
Full-time fiduciary counsel sought by CalPERS to provide specialized fiduciary advice to the system’s board and staff.
CalPERS announce that former(?)/current(?) fiduciary counsel Robert Klausner can bid for the same contract he’s being pushed out of… where he quoted the lowest price per hour of the finalists.
Chief Actuary position open at the California Public Employees’ Retirement System (CalPERS). Search underway for a new Chief Actuary to lead its Actuarial Office. Incumbent will provide independent counsel to CalPERS leadership and Board on actuarial valuations, assumptions and policies, rate structure, and funding of the CalPERS System and related funds.
This search is being led by New York-based Heidrick & Struggles. View a full description of the Chief Actuary career opportunity, including the ideal candidate profile and professional competencies.
Interested parties may contact: Continue Reading →
CalPERS election rules, an obscure topic for most. Although the board of administration of CalPERS is very powerful, interest in CalPERS election rules is low. When proposed rules were discussed at a recent public meeting, I was the only one to provide any feedback. I expect that when there is a public hearing on the CalPERS election rules, I will be the only one testifying. Like corporate governance, pension fund governance gets too little attention.
I have seen much worse proposals before. For example, when they attempted to use CalPERS election rules to muzzle critics (CalPERS muzzles critics: Ballot rules protect board, keep others in the dark). The newly proposed election rules are not of that variety. Still, they hint at a certain degree of arrogance by seeking to put the Board above the law.
The current rulemaking attempts to create flexibility in CalPERS election rules by allowing the board to create rules of general application without going through the legally required rulemaking process. Sound like a technicality? Maybe, but democracy depends on the rules and an open process. I’d love to hear your thoughts in the comment section below.
I like some of the work Yves Smith has have been reporting on CalPERS, which obviously needs not only watching but needs to be constantly reminded of its duties, fiduciary and otherwise. Yes, failing to disclose private equity fees is problematic (I’m also glad JJ Jelincic is on the board Pension Pulse: CalPERS’ Partial Disclosure of PE Fees?)… but not long ago former board members were collecting enormous fees from CalPERS and it wasn’t just Villalobos. Continue Reading →
There it was under my tree, Reeds delivered a corrected proxy for Christmas!
Santa has finally been good to Reeds (REED) shareholders.
I’m tacking notification of the corrected proxy as a sign that Founder/CEO, Christopher Reed might be at the start of a new attitude toward SEC rules and corporate governance, I changed my vote. I voted for Mr. Reed, the auditors, my own proposal to require a majority vote to elect directors and against the rest of the board and the “incentive” stock option plan. The incentive plan lack specificity.
Of course, my proxy didn’t magically appear under my Christmas tree. Reeds Inc. had to pay to have the link to their revised proxy sent out by Broadridge to brokers and banks all over the country. After being reminded several times, Reeds finally did the right thing. Unfortunately, their reluctance and delay necessitated postponing their annual meeting for more than a week but, despite the additional cost to company and shareholders (including me), it is good to see our company now following the law. Continue Reading →
Investors and the public interested in how the California Public Employees’ Retirement System (CalPERS) casts its proxy votes on key decisions in corporate America can now find that information on the CalPERS website.
CalPERS Discloses Proxy Votes
CalPERS has expanded its online disclosure of proxy voting decisions to include those for all publicly held companies in its portfolio. Prior to this expansion, CalPERS provided proxy voting information for the 300 largest public company holdings in its portfolio. Continue Reading →
Medtronic PLC ($MDT) manufactures and sells device-based medical therapies worldwide. Medtronic is one of the stocks in my portfolio. Their annual meeting is on December 11, 2015. ProxyDemocracy.org had collected the votes of two funds when I checked. I voted with the Board’s recommendations 44% of the time. View Proxy Statement.
WDFC develops and sells maintenance products, and homecare and cleaning products. WDFC is one of the stocks in my portfolio. Their annual meeting is on December 8, 2015. ProxyDemocracy.org had collected the vote of one fund when I checked. I voted with the Board’s recommendations 100% of the time. View Proxy Statement.
I don’t think we’ve gone back in time all year… too busy with proxy season. Join us as Mr. Peabody and Sherman prepare to go back in time to visit corpgov.net 5, 10 and 15 years ago. Yes, many links are broken. The world and the internet move on… still, it is worth a few minutes to reflect on where we’ve been.
Five years ago in Corporate Governance
In response to proxy access proposals filed this year, both Whole Foods Market (WFM) and H&R Block (HRB) have adopted proxy access. While I had filed standard proposals seeking the ability of shareholders with 3% of shares held for 3 years to be able to nominate up to 25% of the board, both companies adopted bylaws allowing nominations only up to 20% and limiting nominating groups to 20, whereas my proposals had no such restrictions on the number of participants in nominating groups. Continue Reading →
Deep in the heart of Texas, the oil industry is still going strong. Take Navitas Midstream, a private corporation that specializes in transporting fossil fuels. Navitas is currently laying a pipeline that, when completed later this year, will funnel natural gas fracked from the Eagle Ford Shale into a processing plant that’s also under construction. Called the “La Bahia System,” the pipeline and plant will handle 120 million cubic feet of natural gas per day. La Bahia is part of a labyrinth of fossil fuel infrastructure that’s growing and will generate billions in profits for its owners — even with the current slump in oil prices. But it also is fueling the fracking boom and climate change. Continue Reading →
On Thursday March 5th proxy advisor Glass Lewis held a conference call to discuss proxy access, i.e. the right for shareholders to place their director nominees on company proxies, instead of having to pay for a separate proxy and solicitation.
The New York City Comptroller, Scott Stringer has taken the lead on proxy access this year with his Boardroom Accountability Project and the introduction of 75 proxy access proposals. Continue Reading →
Update: Preliminary voting results indicate that our proxy access proposal got 39% of the vote. Yes, the proposal could have been worded to more closely conform to the Rule 14a-11 standards. Hopefully, Apple got the message and will propose a “best practices” revision of their articles and bylaws as needed for the 2016 annual meeting. If not, we’ll be back at that meeting with our own proxy access proposal.
Engagement is, or should be, the common theme of our three videos. CalPERS argues it gives them a seat at the table. Professor Damodaran extols the importance of engagement as a possibility. As a shareholder, what avenues are open? In Davos, I think they looked through the wrong lens. Instead of engagement, they focused on an assumed end-goal that rules out other human values. Continue Reading →
In his 1914 collection of essays called Other People’s Money and How the Bankers Use It, Louis Brandeis argued that powerful men such as J.P. Morgan leveraged unbalanced control of the public’s assets to their own benefit. One hundred years later, not much has changed. If Brandeis were alive today, you can be sure that he would be advocating for new systems of financial accountability for those on top of the financial hierarchy. Continue Reading →
On January 12, 2015, Stanford’s Rock Center for Corporate Governance hosted a panel discussion called “The Rise of Controlled Corporations.” Unfortunately, this is one program at the Rock Center that I missed.
With Alibaba’s recent IPO on NYSE (instead of Hong Kong or China), the “one-share, one-vote” corporate governance standard has once again been challenged. Continue Reading →
The Norges Bank Investment Management (Norges), the largest sovereign wealth fund in the world, will publish its voting intentions prior to annual general stockholder meetings (AGMs) when it believes such action can help illustrate an important principle. (Norwegian oil fund to disclose voting intentions to illustrate ‘principle’) Continue Reading →