Gerald W. McEntee,
AFSCME: Imperial CEOs Targeted as AFSCME Employees Pension Plan
Announces 2012 Shareholder Proposals
January 21, 2012
The American Federation of State,
County and Municipal Employees, AFL-CIO (AFSCME) Employees Pension Plan
(“the AFSCME Plan”), has filed 21 shareholder proposals designed to
protect and enhance the economic value of its long-term investments. The
Plan’s proposals would require greater director accountability,
independent corporate board leadership, and greater transparency in the
companies in which the Plan invests.
The AFSCME Plan, an institutional shareholder with more than $850
million in assets, has submitted the 21 shareholder proxy proposals for
consideration at annual company meetings this spring. The Plan’s
proposals are designed to increase corporate management’s accountability
and transparency and better align the interests of management with those
of shareowners. The changes sought through these proposals would reduce
risks to the companies’ future performance and protect and improve the
value of these companies’ shares.
“On Wall Street, the model of the imperial CEO who also serves as board
chair has proven to be a failed experiment,” said AFSCME Pres. Gerald W.
McEntee. “Our independent chair proposals are designed to make these
boards un-beholden to an all-powerful CEO and chair and more accountable
to their owners, the shareholders.”
The AFSCME Plan has filed proposals seeking independent board chairs,
annual director elections, and reports on the risks to shareholders of
corporate lobbying expenditures and aggressive corporate tax strategies.
“These 21 proposals will bring greater transparency and accountability
when boards of directors fail to properly represent shareholders’ best
interests. Additionally, as shareowners, we will review Say on Pay at
all companies and voice disapproval for unwarranted CEO pay,” added
Proposals have been filed at: Abbott Laboratories (ABT); Amazon (AMZN);
American Express (AXP); Anadarko Petroleum (APC); AT&T (T); Bank of
America (BAC); Boeing (BA); Chevron (CVX); Coca-Cola (KO); Dean Foods
(DF); Emerson Electric (EMR); Goldman Sachs (GS); Janus Capital (JNS);
Johnson & Johnson (JNJ); JPMorgan Chase (JPM); Kraft Foods (KFT);
Lockheed Martin (LMT); Northern Trust (NTRS); Pfizer (PFE); Union
Pacific (UNP); and Verizon (VZ).
annual elections of management increases management’s accountability to
its shareholders. A proposal seeking the annual election of directors
has been filed at Emerson Electric.
The role of a corporate board is to monitor management, and the person
acting as chair runs the board. But if the board is led by a chair who
is also the Chief Executive Officer (CEO) of the company, then the CEO
effectively becomes his or her own boss. Requiring that different people
fill the roles of chair and CEO avoids that fundamental conflict of
interest. Proposals seeking independent chairs have been filed at
American Express, Anadarko Petroleum, Dean Foods, Goldman Sachs, Janus
Capital, Johnson & Johnson, JPMorgan Chase, Lockheed Martin and Northern
Management’s unconstrained use of corporate funds to support lobbying
activities that may be unrelated or deleterious to the company’s
economic purposes is a risk to shareholder value. Proposals asking that
companies prepare an annual report disclosing their policies and
payments for direct and indirect lobbying activities have been filed at
Abbott Laboratories, AT&T, Bank of America, Chevron, Coca-Cola, Kraft
Foods, Pfizer, Union Pacific and Verizon.
Management’s actions taken to avoid or reduce taxation of its business
activities can create risks for share value, from potential significant
negative effects on financial results to financial restatements.
Proposals asking for a report disclosing a board’s risk assessment of
the company’s actions to minimize taxes have been filed at Amazon and