Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2023 Defined Contribution East
    • 2023 ESG Investing
Breadcrumb
  1. Home
  2. GOVERNANCE
September 12, 2012 01:00 AM

4 groups sponsor lion's share of shareholder proposals, report says

Barry B. Burr
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Four groups sponsored 89% of shareholder proxy proposals this year at Fortune 200 companies, led by labor unions and pension funds, according to a report released Wednesday by the Manhattan Institute, a public-policy advocacy organization.

    Thirty-six percent of shareholder proposals were sponsored by union and public pension funds; 31% by three individual investors, their relatives and family trusts; and 22% by investors with a socially responsible, religious or public-policy purpose, said the report, “Proxy Monitor 2012: A Report on Corporate Governance and Shareholder Activism.”

    “Only 10% of shareholder proposals were sponsored by individuals other than the three 'corporate gadflies,' and only 1% by institutional investors unaffiliated with organized labor or a social, religious or public policy purpose,” the report said.

    Among the unions and public pension funds, 41% are private labor pension funds; 38%, state and city pension funds; 16%, $850 million American Federation of State, County and Municipal Employees Pension Fund, Washington; and 5% other labor-affiliated funds.

    “There is substantial reason to believe that they (public pension plans) are sensitive to organized labor concerns,” James R. Copland, co-author of the report and director of the institute's Center for Legal Policy, said in an interview.

    “Labor-union pension funds' sponsorship of shareholder proposals appears to be unrelated to shareholder return and connected to union-organizing activities and other labor objectives.” the report said.

    Each company that has faced more than two labor-sponsored proposals this year “had share returns that outperformed its peer group in 2011,” while “each company, however, had been engaged in public disputes with labor unions or had played an active role in the political process against organized labor interests,” the report said.

    “What a company did (in shareholder performance) in the last year makes a lot of sense” in analyzing proposals, Mr. Copland said, acknowledging that the full one-year return might not be available to proponents before the proposal filing deadlines and that fiduciaries tend to have longer-term horizons in determining investment performance.

    Among other findings, the report said Institutional Shareholders Services, a corporate-governance and proxy-voting advisory firm, exercises significant influence on the outcome of proxy voting through its recommendations to institutional investors.

    A favorable recommendation on a proxy issue by ISS generally increases voting support by 15% for a shareholder proposal, “controlling for other factors,” the report said.

    “ISS consistently supports a much higher share of shareholder proposals (63%) than do shareholders overall (less than 8%),” the report said.

    Lisa Lindsley, AFSCME director of capital strategies, said in an interview that the report is incorrect in attributing union-sponsored proposals to labor organizing activity.

    “Our primary screening tool is to look at the one-, three- and five-year total shareholder return (of questioned companies) compared to their peers,” Ms. Lindsley said. “Our only consideration is to file proposals that improve shareholder value over time. To attribute what we are doing to union organizing activity is incorrect.”

    Brandon Rees, acting director of the AFL-CIO Office of Investment, said in an interview the union pension funds measure the success of shareholder proposals they sponsor by their ability to improve shareholder performance of companies.

    Ms. Lindsley said the report has a number of analytical failings, including not taking into account proposals that were withdrawn by proponents because settlements with targeted companies were reached and weren't offered for a vote.

    Mr. Copland said the report looked at only proposals that came for a vote.

    The report examined 178 of the largest companies that had filed proxy statements as of July 15, 173 of which have held their annual meeting. Mr. Copland said the institute's limited resources restricted the number of companies examined for the study.

    Cheryl Gustitus, ISS spokeswoman, couldn't be reached.

    Related Articles
    CEO pay size matters more in shareholders' votes, says ISS
    Goldman Sachs cuts deal with AFSCME over dual CEO/chairman
    Pension funds target Aetna, others on political spending
    CII gets specific on its executive clawback recommendations
    Pfizer to pay $67.5 million to settle investor suit over drug Pristiq
    Miami Beach pension fund wins shareholder suit over currency derivatives
    4 big managers get low scores on AFL-CIO labor proxy-voting issues
    European regulator: Proxy voting advisory industry should regulate itself
    4 pension plans not following herd with proxy votes
    Proxy voting system broken, concentrates power in proxy advisers — paper
    Union-backed shareholder activism fails to increase value — report
    Recommended for You
    DiNapoli_Thomas_Jan2023_i.jpg
    New York State Common asks 7 companies to disclose political spending
    ONLINE_180129955_AR_0_WARRKZGXMCND.jpg
    SSGA expands proxy-voting power to investors in certain institutional funds
    Vanguard_Logo_1550_i.jpg
    Vanguard to explore expanding proxy-voting power for retail investors
    The Institutional Investor's Guide to ESG Investing
    Sponsored Content: The Institutional Investor's Guide to ESG Investing

    Reader Poll

    January 25, 2023
    SEE MORE POLLS >
    Sponsored
    White Papers
    Show Me the Income: Discovering plan sponsor and participant preferences for cr…
    The Future of Infrastructure: Building a Better Tomorrow
    Fulcrum Issues: Equity Returns and Inflation — Choose Your Own Adventure
    What Matters Most in Considering a Private Debt Strategy
    Why pursue direct lending in the core middle market?
    Research for Institutional Money Management
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2023 Defined Contribution East
      • 2023 ESG Investing