New York City Comptroller Scott Stringer on Friday revised guidelines for the city retirement systems’ corporate governance principles and proxy-voting guidelines, adding more of a focus on disparate pay ratios and LGBT inclusion on boards.
“We overhauled our proxy guidelines so companies, and the members of the city’s retirement system, know our expectations,” Mr. Stringer wrote in an e-mail statement to Pensions & Investments. He is the fiduciary for the five city pension funds within the $154 billion New York City Retirement Systems.
The guidelines update existing retirement system standards for proxy-voting regarding board diversity based on sex and race, executive pay, labor practices and environmental policies.
One addition is a challenge to corporate boards to address “an excessively high disparity between CEO pay and median worker pay compared to peers,” according to a news release issued Friday. Board members will be on notice to provide a “compelling justification” for wide differences between CEO pay and media worker salaries.
Although the retirement system has promoted diversity in corporate management regarding gender and race, it has added the inclusion of lesbian, gay, bisexual and transgender directors for corporate consideration, the news release said.
“These new guidelines are the starting point of any conversation we will have with our portfolio companies,” Mr. Stringer said in the news release. The new guidelines are on the comptroller’s website.
The guidelines were approved by each board of trustees of the five city pension funds. They are “consistent for all five funds, however, each fund retains discretion to modify existing or implement new guidelines that are specific to its fund,” the news release said.
The broad areas of focus for the city retirement system’s monitoring and proxy voting are board diversity, board oversight of climate risk and employee practices, executive pay, environmental stewardship, human rights practices and “excessive” board tenure, the news release said.
