CalSTRS, the Florida State Board of Administration and the AFSCME Pension Plan all oppose three of the five directors up for re-election at Legg Mason, according to the pension funds' proxy-voting reports.
RiskMetrics also recommended shareholders vote against the re-election of John E. Koerner III, Scott C. Nuttall and Cheryl Gordon Krongard, all members of the Legg Mason board's compensation committee, while Egan-Jones Proxy Services recommends voting to re-elect all the directors, according to the reports of the proxy-voting advisory firms.
The $850 million American Federation of State, County & Municipal Employees Pension Plan, Washington, has led a campaign to oppose the three directors for their approval of executive incentive payments following the company's 72% drop in stock price and $1.95 billion net loss for the year ended March 31.
The $122.4 billion California State Teachers' Retirement System, Sacramento, and RiskMetrics support a proposal co-sponsored by the AFSCME plan and the $102 billion Florida board, Tallahassee, calling for a deferral period for paying executive incentive compensation to encourage a long-term orientation in corporate management.
The pension funds and RiskMetrics also support a proposal sponsored by the $558 million United Brotherhood of Carpenters Pension Fund, Washington, calling for Legg Mason directors to be elected by a majority of shareholder votes. Egan-Jones opposes the compensation proposal but supports the majority-vote proposal.
Legg Mason opposes the shareholder proposals. The company's proxy statement said compensation should be determined by a combination of corporate metrics and individual performance, “not by adherence to strict formulas based on corporate performance.” Also, it believes a plurality vote standard provides stockholders “a meaningful role in the election of directors,” the statement said.
A management proposal to amend an executive incentive stock plan to increase the number of shares is being supported by the AFSCME plan, RiskMetrics and Egan-Jones, while opposed by CalSTRS and Florida SBA.
Legg Mason's annual meeting is Tuesday.