CalPERS and the New York City Retirement Systems are calling on shareholders to oppose the re-election of four independent directors to Duke Energy Corp.’s board, accusing them of having “failed to fulfill their obligations of risk oversight as members of a committee overseeing health, safety and environmental compliance at the company,” according to a joint filing with the Securities and Exchange Commission.
The $285.5 billion California Public Employees’ Retirement System, Sacramento, and the five New York City pension funds, which have a combined $150 billion in assets, urged shareholders to vote against G. Alex Bernhardt Sr., James B. Hyler Jr., James T. Rhodes and Carlos A. Saladrigas, all members of the seven-member regulatory policy and operations committee.
“We are in the process of reaching out to investors, including calls via the Council of Institutional Investors and a proxy talk” webinar on Duke Energy hosted by Glass Lewis, a proxy-voting advisory firm, said Eric Sumberg, deputy communications director and press secretary for Scott M. Stringer, New York City comptroller, who oversees the city’s pension fund assets, in an e-mail.
Register here for the Glass Lewis webinar, scheduled 11 a.m. to 12:30 p.m. PDT April 17.
The pension funds targeted the four directors because they have been on the board a long time, while John T. Herron, also a committee member nominated for election, has been a director since only last year and two other committee members were not renominated to the board, Mr. Sumberg said.
The pension funds raised concerns about “the serious failures of oversight” regarding financial, legal, regulatory and reputational costs of environmental risks, according to their filing.
Representatives of CalPERS and Mr. Stringer sought a meeting with a Duke Energy board member to discuss a February coal-ash spill, according to the filing. Duke responded with a call only with executives, “who acknowledged on the call that they did not convey our request to the board,” the filing said. “Management reported that the board was receiving reports from management in connection with the spill, but had not initiated any independent reviews.”
Duke spokesman Dave Scanzoni said, “We are going to decline to comment.”
Todd Mattley, investment office-corporate governance at CalPERS, couldn’t be reached for comment.
The New York City pension funds — the Employees’ Retirement System, Teachers’ Retirement System, Police Pension Fund, Fire Department Pension Fund and Board of Education Retirement System — own a combined 1.8 million Duke Energy shares, valued at $131 million. The company has 706 million shares outstanding.
Charlotte-based Duke Energy’s annual meeting is May 1.
