PGGM NV and RPMI Railpen called on Oracle Corp. to implement proxy access, adopt an executive compensation structure shareholders can support and develop a policy to allow shareholders to communicate directly with the board, the pension fund managers said in a letter to Oracle.
Else Bos, CEO of PGGM, fiduciary manager based in Zeist, Netherlands, and Chris Hitchen, CEO of the Railways Pensions Trustee Co. Ltd., London, whose £20 billion ($30.1 billion) pension fund is managed by RPMI, sent a letter Monday to Oracle’s board of directors, calling for it to be more responsive and accountable, saying, “We write as long-term shareholders of Oracle … who have deep concern about the company’s governance.”
In all, PGGM and Railpen have a combined $238 billion in assets under management, the letter states.
“Our interests, as two non-insider shareholders, are at even greater risk when there is evidence that the interests of insiders are put before those of the broader shareholder base; we believe this to be the case at Oracle … where the founder owns 26% of the outstanding shares,” their letter states. “The vote results at recent annual meetings demonstrate this misalignment of interests and call into question the board’s judgment in light of the fiduciary duty which it owes to all shareholders: For three consecutive years, the advisory vote on compensation has been defeated and certain directors, namely the members of the Compensation Committee, were only re-elected at the 2013 annual meeting because they had the voting support of the founder.”
In their letter, Ms. Bos and Mr. Hitchen describe Oracle’s lack of response to their appeals for communications, including turning down a request made after representatives of the firms traveled to Oracle’s headquarters in Redwood Shores, Calif., last November and earlier letters from the pension fund executives that apparently “were never received by the board.”
Deborah Hellinger and Jessica Moore, Oracle media representatives, couldn’t be reached for comment.