With annual meeting season under way, pension funds and managers are in full swing on shareholder resolution activity.
The Connecticut Retirement Plans and Trust Funds, Hartford, withdrew its shareholder resolutions at six companies "because of significant progress in discussions on corporate governance issues," according to Denise L. Nappier, state treasurer and trustee of the $20 billion system. Resolutions at Office Depot Inc. and Siebel Systems Inc. concerned executive compensation. Its resolution at McDermott International Inc. called for electing all directors annually, instead of only one-third each year; and at Nextel Communications Inc., it called for a majority of independent directors. The resolution at American Electric Power Service Corp. concerned global warming and greenhouse gas emissions; and at Mattel Inc., excessive executive severance benefits.
"We will monitor actions by each company to fulfill their commitment," she said in a statement.
In New York, Domini Social Investments announced it filed shareholder resolutions at Gap Inc. and Sears, Roebuck & Co. over what it calls sweatshop issues. It also is in discussions with Walt Disney Co., McDonald's Corp. and Nordstrom Inc. on international labor standards.
Domini revealed it filed seven other resolutions for the 2002 proxy season and is talking with eight other companies on a range of social and environmental issues.
And Institutional Shareholder Services, Bethesda, Md., is recommending investors vote against an International Business Machines Corp. shareholder proposal that would require the company to exclude pension income from its computations of net income, on which executives' incentive compensation is based.
Although ISS agrees with the basic notion that a company's pension income should not be used to inflate executive pay, it noted IBM's pension income contributes a small amount to its bottom line, according to a June 2001 study by Credit Suisse First Boston.