WEST SACRAMENTO, Calif.--(BUSINESS WIRE)--The California State Teachers’ Retirement System’s successful engagement efforts during the 2011 proxy season resulted in the withdrawal of 21 of 26 proposals for a majority vote in corporate board elections.
Engagement efforts backed by strong shareholder support prompted a substantial number of the largest U.S. companies to adopt the standard, which requires that a board nominee receive a majority of the shareholder votes cast in order to be re-elected and continue to serve as a representative for the shareholders.
In fact, less than 20 percent of companies in the S&P 500 still maintain a strict plurality standard. This is in stark contrast to the Russell 2000, an index of small to mid-sized companies, where over two-thirds of the companies still maintain a plurality standard where a nominee can be elected with a single affirmative vote.
“Engaging companies to improve director election standards has been particularly successful this year because we’ve shown these improvements set the groundwork for sustained performance,” said CalSTRS Director of Corporate Governance Anne Sheehan. “These changes increase long-term shareholder value for the educators of California.”
CalSTRS submitted 26 proposals for majority voting on corporate boards. Twenty one were withdrawn after companies made progress in implementing the proposals.
- Majority vote resolutions passed with 62.6 percent of the proxies at Clean Harbors Inc., with more than 70 percent at Masimo Corp., and with more than 72 percent at Netlogic Microsystems.
- At Wilshire Bancorp, the company included a management proposal and supported the CalSTRS proposal. Both passed, receiving more than 85 percent of the vote.
- The final proposal will go to vote at Enersys on August 4, 2011.
The California State Teachers’ Retirement System, with a portfolio valued at $154.3 billion, is the largest teacher pension fund in the United States. CalSTRS administers a hybrid retirement system, consisting of a traditional defined benefit, cash balance and defined contribution plans, as well as disability and survivor benefits. CalSTRS serves California's 852,000 public school educators and their families from the state’s 1,600 school districts, county offices of education and community college districts.