TIAA-CREF, New York, toughened its policy on corporate governance, increasing focus on executive compensation, anti-takeover measures and, for the first time, global corporate governance principals, although it wont target foreign companies.
The policy, the second revision since its initial statement in 1993, places executive compensation foremost, especially executive stock options. We believe that how a company deals with highly visible executive compensation issue provides a clear indication of how effectively it is handling overall corporate governance, said Peter Clapman, senior vice president and chief counsel-investments, in a statement accompanying the unveiling of the revised policy today.
TIAA-CREF, which manages $285 billion for tax-exempt clients, expects to vote against more executive stock option proposals this year, perhaps against 35% of the proposals at the companies where the issue has come up for a shareholder vote. Last year, it voted against 30%, up from about 25% a few years ago.