PHILADELPHIA - While many activist institutional investors are pressing corporations to require their directors to own specified amounts of company stock, officials of the Philadelphia Municipal Pension Fund has adopted a new proxy voting policy in which it votes against such proposals.
The $2.83 billion fund's proxy voting policy explains that while it might be desirable for directors to own stock in the companies they oversee, many qualified directors might not be able to afford the stock.
The Philadelphia pension fund's thinking also runs counter to many activist funds by voting against shareholder proposals seeking to limit the terms of non-employee directors.
Some large institutional investors, seeking to ensure directors keep a watchful eye on the companies, typically request that companies impose term limits on directors.
But the Philadelphia pension fund policy argues that the companies could lose experienced and knowledgeable directors by imposing term limits.
And finally, the city pension fund intends to vote against investor requests seeking to eliminate or restrict corporate charitable contributions.
Philadelphia pension fund officials feel that the companies - and therefore their shareholders - benefit from the goodwill, support and name recognition such contributions generate.
