Connecticut Retirement Plans and Trust Funds, Hartford, filed shareholder proposals at Goldman Sachs, Citigroup, Bank of America and nine other corporations over a number of executive pay practices, according to a news release.
“The current economic crisis underscores what we've been saying all along: Large paychecks don't guarantee good performance,” state Treasurer Denise L. Nappier, who serves as principal fiduciary of the combined $22.7 billion funds, said in the Feb. 9 news release. “It is therefore critical for boards to ensure that management's interests are aligned with those of shareholders through compensation structures that strongly link pay to both individual and company-wide long term performance.”
A say-on-pay proposal, which would give shareholders an advisory vote on executive pay, was sent to Goldman Sachs, WellPoint, ConocoPhillips and CVS/Caremark. The news release said the proposals to both Goldman and ConocoPhillips were withdrawn after the agreements were reached with the two companies on executive pay advisory votes.
Treasury spokeswoman Lisa Monroe could not be reached for comment by press time.
The Connecticut funds also proposed provisions at The Dow Chemical Co. and Chesapeake Energy that aim to ensure responsible use of company stock. The Dow proposal, co-filed with the $850 million AFSCME Employees Pension Plan, Washington, requests that the board require executives to hold a significant portion of their company stock for two years following their departure from the company.
Another proposal, requiring United Technologies Corp. to adopt so-called responsible severance packages, was withdrawn after agreement was reached with the company concerning large payouts to executives in merger situations where there is no risk of job loss and on compensation for executives to make up for federal taxes on severance awards. The details of the agreement were not disclosed in the news release.
Connecticut withdrew a proposal aimed at Citigroup requiring disclosure of fees paid to compensation consultants, noting that the firm affirmed that its board now uses an independent compensation consultant. A similar proposal co-filed with the AFL-CIO at Halliburton is expected to go to a vote at the company's annual meeting April 20.
The Connecticut funds also filed a proposal with Bank of America asking the company to require CEOs to fully participate in the board succession planning process. The proposal aims to limit transition risks and other costs.
In an effort to encourage accountability of directors, Connecticut is calling on the boards of Abercrombie & Fitch and Nabors Industries to allow for annual elections to board seats instead of on a triennial basis.
