For Immediate Release
Thursday, February 14, 2013
Too Big to Fail and Imperial CEOs Targeted as AFSCME Employees Pension Plan Announces 2013 Shareholder ProposalsWashington, DC —
The AFSCME Employees Pension Plan (“the AFSCME Plan”), today announced that it has filed 25 shareholder proposals designed to protect and enhance the economic value of its long-term investments.
The AFSCME Plan, an institutional shareholder with more than $850 million in assets, has submitted the 25 shareholder proxy proposals for consideration at annual company meetings this spring. The Plan’s proposals are designed to increase corporate management’s accountability and transparency and better align the interests of management with those of shareowners. The changes sought through these proposals would reduce risks to the companies’ future performance and protect and improve shareholder value.
“Business as usual in the corporate boardroom needs to end,” said AFSCME Pres. Lee Saunders, who also serves as the Chair of the AFSCME Plan’s Pension Committee. “These proposals will bring greater transparency and accountability when boards of directors fail to properly represent shareholders’ best interests,” added Saunders.
Proposals have been filed at: Abbott Laboratories (ABT); Bank of America (BAC); Caterpillar (CAT); Chevron (CVX); Citigroup (C); Freeport-McMoRan (FCX); General Electric (GE); Halliburton (HAL); Johnson & Johnson (JNJ); Lazard (LAZ); Leucadia National (LUK); Lockheed Martin (LMT); McDonald's (MCD); Morgan Stanley (MS); Nabors (NBR); Northrop Grumman (NOC); Peabody Energy (BTU); Precision Castparts (PCP); QEP Resources (QEP); Target (TGT); Union Pacific (UNP); Verizon (VZ); Vulcan Materials (VMC); and Wal-Mart (WMT).
The proposal request that boards of directors of “too big to fail” financial firms explore strategic options (e.g. merger, acquisition, or spinoff) in order to realize greater value for shareholders. These resolutions have been filed at large financial firms whose stock market value is less than their book, or accounting, value. Proposals asking for strategic reviews have been filed at Bank of America, Citigroup and Morgan Stanley.
Board diversity, including ethnic and gender diversity, is linked with higher shareholder value. Proposals asking for inclusion of diversity standards in selection criteria for board nominees have been filed at Leucadia National and Precision Castparts.
A company’s failure to monitor its compliance with established human rights standards, and compliance by its affiliates and supply-chain organizations, can harm shareholder value, as companies can be exposed to fines, lawsuits and reputational damage. A human rights risk assessment and report will enable shareholders to understand any risks to shareholder value associated with such human rights and labor abuses. Proposals asking the board to report on human rights risks arising out of its operations have been filed at Caterpillar, Halliburton and McDonald’s.
The role of a corporate board is to monitor management, and the person acting as chair runs the board. But if the board is led by a chair who is also the Chief Executive Officer (CEO) of the company, then the CEO effectively becomes his or her own boss, eliminating the independent oversight needed to protect shareholder interests. Requiring that different people fill the roles of chair and CEO avoids that fundamental conflict of interest. Proposals seeking independent chairs have been filed at Freeport-McMoRan, General Electric, Johnson & Johnson, Lazard, Lockheed Martin, Nabors, Peabody Energy, QEP Resources, Target, Vulcan Materials and Wal-Mart.
Management’s unconstrained use of corporate funds to support lobbying activities that may be unrelated or deleterious to the company’s economic purposes is a risk to shareholder value. Proposals asking that companies prepare an annual report disclosing their policies and payments for direct and indirect lobbying activities have been filed at Abbott Laboratories, Chevron, Northrop Grumman, Union Pacific and Verizon.