New Survey Shows Large Public Funds Support Strong Proxy Access Rules for Director Elections

WASHINGTON — Major public retirement systems among the largest institutional shareholders in the country support a strong proxy access rule-making by the Securities and Exchange Commission (SEC), according to a survey released today by the American Federation of State, County and Municipal Employees (AFSCME), AFL-CIO. Funds with more than $1.2 trillion in assets think it's important to empower groups of shareholders to use a corporation's proxy to nominate directors as a method to improve corporate governance.

AFSCME President Gerald W. McEntee noted that since the market highs of 2000, the retirement funds of AFSCME members have lost more than $300 billion in assets. "This survey shows that these public funds need and want proxy access to challenge directors at failed corporations," said McEntee. "There is strong support for the SEC to make rules that will allow shareholders to vote on directors in companies where there are significant financial restatements or corporate scandals."

The key findings of the survey of the largest 100 public pension funds show:

Eighty-one percent believe that it's at least important to empower shareholders through proxy access.
Eight in ten plans would consider voting for a shareholder nominated candidate.
More than eighty percent believe that shareholders should have access to the proxy card at the next annual meeting.
Seventy percent believe that access should be granted because of significant financial restatements.

The proposed SEC rules are being drafted and scheduled for release on Wednesday to allow shareholder-nominated directors to appear on publicly owned companies' proxy statements.

"We want the proxy access rules implemented for the next cycle of board elections at 2004 annual meetings. We cannot afford to let another election cycle occur without them - the assets of America's investors depend on it," McEntee said. "We must have trigger mechanisms in the cases of scandal and fraud that will give investors the ability to use proxy access rules in a timely manner so that they can impact corporate conduct in the shortest period of time possible."

The survey was conducted by Lussier, Gregor, Vienna & Associates, Inc. on behalf of AFSCME. The nation's 100 largest public pension plans based on assets participated in the survey and the results were based on responses to a written questionnaire received between September 9 - 30, 2003. The full report can be found below.

Last month AFSCME released a Harris Interactive Poll showing more than eighty percent of individual investors supported proxy access.

Related Documents:

Public Pension Funds Strongly Support Broad Proxy Access Rights for Director Elections - Summary
"Reforming Corporate Director Elections" - full report: PowerPoint / PDF
New Poll Shows Groundswell of Investor Support for Reforming Corporate Director Elections (Harris Interactive poll - September 2003)

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American Federation of State, County
and Municipal Employees, AFL-CIO
1625 L Street, N.W. Washington, D.C. 20036-5687
Telephone (202) 429-1145
Fax (202) 429-1120

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