Charles Schwab Corp. shareholders approved a pension fund-led proxy access proposal that would allow shareholders to nominate company directors.
More than 61% of shareholders voted in favor of the non-binding proposal at the company's annual meeting May 16, according to Charles Schwab's recently filed 8-K.
The terms for proxy access, proposed by the $320.7 billion California Public Employees' Retirement System, Sacramento, and the $170.6 billion New York City Retirement Systems, were ownership of at least 3% of the company's outstanding stock, three years of continuous ownership and the ability to nominate up to 25% of the company's board.
The $202.8 billion California State Teachers' Retirement System, West Sacramento; $189.4 billion Florida State Board of Administration, Tallahassee; C$316.7 billion ($230.8 billion) Canada Pension Plan Investment Board, Toronto; and the $133.2 billion Texas Teacher Retirement System, Austin; also supported the process access proposal, according to their proxy-voting disclosures,.
In its proxy statement, Charles Schwab had urged investors to vote against the pension funds' proposal, arguing that it “risks disruption in unforeseen ways.”
“With these proposed thresholds, contested director elections could occur every year, leading to high turnover, inexperienced directors with insufficient knowledge and understanding of our current and past business, and directors who could promote the influence of special interests over the interests of all stockholders,” Charles Schwab said in its proxy statement released in March. “Unlike other public companies where there are few concentrated stock positions, and it is difficult to amass 3% of outstanding shares among investors, there are five institutions that each hold over 3% of the company's stock. The top 20 institutional holders of common stock of the Charles Schwab Corp. hold over 45% of the outstanding common stock.”
On the flip side, lobbying and employment diversity-related proposals were rejected by shareholders at the May 16 meeting.
The lobbying disclosure proposal called for a report on the company's direct and indirect lobbying disclosures and expenditures, and was only supported by 24% of shareholders.
The employment diversity proposal, which was filed by New York City Comptroller Scott M. Stringer on behalf of the New York City Retirement Systems, called for Charles Schwab to disclose annually its EEO-1 data — a breakdown of its workforce by race and gender and according to 10 employment categories. Only 25% of shareholders voted in favor of the employment diversity disclosure proposal.
According to their proxy-voting disclosures, CalPERS, CalSTRS, CPPIB and Texas Teachers supported both proposals. The Florida State Board of Administration voted in favor of the lobbying disclosure proposal and against the employment diversity proposal.
Charles Schwab had recommended that shareholders vote against both proposals.