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Governance

NYC comptroller reports two-thirds of engaged companies took steps toward proxy access

Nearly two-thirds of companies served with challenges to corporate governance by the New York City Retirement Systems agreed during the 2017 proxy season to make changes and avoid a proxy fight, said a report Tuesday by Scott Stringer, New York City comptroller and fiduciary for the five pension funds in the $189 billion city pension system.

The pension system filed 92 proposals with 88 companies, but 60 proposals were withdrawn after companies agreed to make changes, the report said.

Most of the filed proposals — 71 — related to proxy-access bylaws allowing shareholder-nominated director candidates to be placed on company ballots. Among the proxy-access proposals, 51 companies enacted or took steps to enact "meaningful proxy-access" policies, the report said.

The proxy-access efforts are part of the Boardroom Accountability Project that Mr. Stringer inaugurated in the fall of 2014. The city pension system proposals seek changes in corporate bylaws to allow shareholders who have collectively held 3% of a company's stock for at least three years to nominate up to 25% of a company's directors using the company's proxy materials, the report said.

Proxy-access proposals focused on companies that had "inadequate board diversity, excessive CEO pay or exposure to risks related to climate change," the report said.

Also, the report said seven of 10 health and insurance companies responding to pension fund inquiries on gender pay equity agreed to provide "enhanced disclosure."

"Responsive companies generally made the case that their analyses showed no significant gender pay gap," the report added.