The proposal calls for the company “to ensure that its products not be sold to the government of Sudan or entities controlled by it” and report to shareholders by December its progress in implementing that goal.
Thomas P. DiNapoli, New York state comptroller and sole trustee of the $152.9 billion New York pension fund, released a statement Thursday, saying the proposal will appear in the company's proxy materials for its June 12 annual meeting.
Tonya K. Aldave, attorney-adviser, office of chief counsel, Division of Corporation Finance, Securities and Exchange Commission, wrote in a March 7 letter to Christopher M. Reitz, Caterpillar corporate secretary, that the company couldn't exclude the proposal, according to SEC filings.
In a Jan. 30 letter to the SEC, Mr. Reitz asked for permission to exclude the proposal, saying, according to SEC filings, “Insofar as the company has direct control over the sale of its products to the 'government of Sudan or entities controlled by it,' the essential objective of the proposal has been implemented. The passive language of the proposal appears to go beyond this, however, by asking that the company ensure that its products 'not be sold.' To the extent that such language contemplates that Caterpillar will take additional actions to ensure that no other, unaffiliated person sells company products without the company's permission to Sudan's current political regime or entities controlled by it, the company simply does not and could not control for this. There are, for example, potentially millions of pieces of used Caterpillar equipment that are resold in markets over which Caterpillar has no control.”
The New York pension fund adopted in 2009 a process for divestment for companies with ties to Sudan and Iran, Eric Sumberg, spokesman, said in an e-mail. In 2009, the pension fund divested $86 million in investments from nine companies and froze from further investments seven companies doing business in Iran and Sudan over concern about human-rights abuses.
Jim Dugan, Caterpillar spokesman, confirmed the proxy statement, which the company expects to issue around April 22, will include the shareholder proposal, as well as the company's formal response to it. Company officials don't want to get ahead of the proxy statement response to comment now, Mr. Dugan added.
New York State Common owned 1.9 million Caterpillar shares, valued at $176.9 million, as of March 15.