For Immediate Release
Monday, February 14, 2000
AFSCME Demands Meeting Between Mattel Board, Large Shareholders; Union Launches Program to Enhance Public Employee Ownership Power
WASHINGTON, DC —Gerald W. McEntee, president of the American Federation of State, County, and Municipal Employees (AFSCME), AFL-CIO, has written to William D. Rollnick, acting chairman of Mattel, Inc., demanding a meeting between board members and large investors in the company. The demand comes in the wake of the forced resignation of Jill Barad, Chairwoman and CEO of the company, which lost $8 billion in market value during her tenure. In the letter, McEntee, who is also chairman of the public employee union's staff retirement fund, calls for full consultation with investors on the selection of a new CEO, Board nominations and anti-takeover defenses.
"Eight billion dollars is a lot of shareholder value to lose in such a short time," McEntee wrote in his letter to Rollnick. "We believe Mattel's Board owes the Company's shareholders a complete discussion and heightened influence over who is going to lead and oversee this Company in the future."
The letter to Mattel is evidence of AFSCME’s new, multifaceted program to increase public employee influence in the shareholder arena. Funds maintained for the retirement benefits of AFSCME members total over $1 trillion in assets. AFSCME members and representatives are trustees on the boards of some of the largest of these funds including the California Public Employee Retirement System (CALPERS) and the New York City Employee Retirement System (NYCERS).
AFSCME's program's activities will be coordinated by the union's newly formed Office of Corporate Affairs. The filings of shareholder resolutions are the first-ever from AFSCME's $500 million staff retirement fund. AFSCME's program will also seek to increase contact among trustees of public employee pension funds. These trustees represent the interests of the union's members and will elevate corporate governance and investment issues of particular importance to public employees.
"For many years AFSCME members have served as trustees on public employee pension boards," McEntee said. "They have been leaders in holding corporations accountable to plan participants and shareholders. They have also been a powerful voice for responsible corporate conduct here in the United States and around the world. The goal of our program is to build on this work. We will reach out to trustees and assist them in becoming even more actively engaged. The union’s staff retirement fund itself will become a leader in defining cutting edge shareholder issues."
The initial goals of AFSCME's program are to:
- Protect the value of investments of the union's staff retirement fund and the solvency of public employee funds.
- Promote greater corporate accountability to shareholders by submitting shareholder proposals from the union's staff retirement fund.
- Intensify efforts to gain trustee seats for employees at key funds where currently there is no employee representation. Currently 48 of the top 100 public employee pensions have no worker-elected trustees.
- Initiate studies on the impact of diversification into government services, a process called privatization of public services on the value of investment portfolios and the financial health of public employee plans.
- Engage in an aggressive trustee outreach and information exchange program for trustees of public employee pension boards to increase the level of activism and to support funds’ initiatives.
The union's staff plan, officially named the AFSCME Employees Pension Plan, has submitted shareholder proposals to five companies to be voted on at their annual meetings this year:
- The Bank of New York Company, Inc.: Redeem or Vote Poison Pill
- Baxter International, Inc.: Declassify Board of Directors
- Conseco, Inc.: Declassify Board of Directors Great Lakes Chemical Corp.: Declassify Board of Directors
- Mattel, Inc: Redeem or Vote Poison Pill
