For IMMEDIATE RELEASE
Monday, May 09, 2005
AFSCME Pension Plan Calls for Reforms at AIG
Washington — The AFSCME Employees Pension Plan outlined a four-point reform agenda in a letter today to large shareholders of the American International Group (AIG) (NYSE:AIG).
In order to restore investor confidence, AIG must engage with shareholders about proxy access and the future composition of its board of directors. Internal control mechanisms and the corporate governance structure must provide effective checks and balances to protect shareholder value, said Gerald W. McEntee, chairman of the AFSCME Plan.
McEntee added, AIG proves our case that shareholders — the true owners of the company — need the power to nominate directors where boards have failed. The company is restating its financial records for the past 4 years, acknowledging billions of dollars in errors in its accounting practices. The Board of Directors bears responsibility for oversight at AIG. Shareholders need to be sure that structural reforms are in place to protect against this happening again.
The AFSCME Plan is engaged in a legal battle with the company over the right of shareholders to vote on a proxy access amendment to the companys bylaws at its annual meeting. AFSCME members and other public employees whose pension funds own approximately 3.8% of AIGs common stock lost almost $1 billion due to the falling stock price of the company over the past 6 months.
AFSCME seeks shareholder support for the following reforms from the companys board:
- End litigation blocking a vote on the proxy access proposal and support a by-law change that would require AIG to inform shareholders of all candidates for seats on the board of directors who have substantial shareholder support.
- An agreement that the governance committee and lead director consult with major shareholders to seek consensus on nominations to the companys board to be elected at the next annual meeting once it is scheduled.
- An amendment to AIGs bylaws to require that the Board chairman be an independent director who has not served as an officer of the company;
- Restructuring of the Audit committee with new members of the board who are untainted by AIGs past practices.
The AFSCME Employees Pension Plan, with $700 million in assets owns 26,965 shares of AIG.
- Letter to AIG Shareholders