In a continuing effort to effect needed reforms in the corporate governance area, New York City Comptroller William C. Thompson, Jr. today announced a shareholder campaign that calls for companies to establish a process for acting on shareholder proposals that win majority votes. The campaign was initiated in response to the long-term unwillingness of many corporate boards of directors to acknowledge majority votes with which they disagree.

The Comptroller was joined by trustees of the five New York City pension funds and trustees of other public and Taft Hartley funds. Among those represented were New York State Comptroller Alan G. Hevesi; Bruce Raynor, International President of UNITE; Tom Sherman, Government Relations Officer for Ohio PERS; John Gray, Chief Policy Analysts for the AFL-CIO; Richard Ferlauto, Director of Benefit & Pension Policy for AFSCME; Adam Kanzer, Legal Counsel for Domini Social Investments; Arthur Cheliotes, President of CWA Local 1180; Sarah Teslik, Executive Director of the Council of Institutional Investors; and John Adler from the SEIU Capital Stewardship Program. Together, these funds represent total assets in excess of $214.3 billion dollars in publicly held funds.

"Investors must vigorously oppose the blatant disregard that many corporate boards of directors have for shareholder proposals that win majority votes," said Thompson. "The accounting and financial scandals of the past year have highlighted the importance of adopting governance reforms across America. In 2003, New York City's pension systems will join with other institutional investors to ask corporate America to change its ways."

Over the past 10 years, proxy votes cast in support of shareholder proposals seeking corporate governance reform of issues such as classified boards, director independence and golden parachutes have markedly increased. The proposal to repeal the classified structure of corporate boards and to elect all directors annually now routinely wins majority votes. While some companies have responded to shareholder proposals by adopting needed reforms, many corporate boards of directors dismiss these majority votes, deliberately disregarding the wishes of their shareholders.

Thompson added, "As part of this campaign, we will submit shareholder proposals to intransigent companies, calling on their boards to stop stonewalling and to establish procedures for acting on the expressed wishes of their shareholders."

To swiftly resolve this pressing issue, the campaign proposes the adoption of the following five points:

• Institutional Investors - Lead national campaign calling for corporate responsiveness to shareholder-approved proposals that receive majority votes, including holding individual directors accountable for their actions.
  
• Company Boards of Directors - Should adopt and publish policies governing their actions in response to shareholder proposals that win majority votes.
  
• The Nasdaq, NYSE, and AMEX - Should adopt a listing standard requiring companies to adopt and disclose policies governing their response to shareholder proposals that are supported by majority votes.
  
• The Securities and Exchange Commission - Should publish rules setting minimum standards for corporate responsiveness to shareholder proposals received through majority votes, and should eliminate barriers that discourage shareholder actions such as running short slates of directors.
  
• United States Congress - House and Senate Committees should hold hearings which would result in legislation encouraging companies to comply with majority shareholder votes.

So far in the 2003 proxy season, the New York City pension funds and retirement systems have majority vote proposals before Goodyear Tire & Rubber Company, The Gillette Company and Wisconsin Energy. The proposals submitted in this campaign follow up on prior actions of the New York City pension funds. In 2002, the New York City Teachers' Retirement System submitted a proposal to repeal the classified board and elect all directors annually to Goodyear Tire & Rubber Company, where it won a majority vote of 72 percent. The New York City Employees Retirement System (NYCERS) submitted the same proposal to Wisconsin Energy and Gillette Company, where it won majority votes of 59.8 percent and 55.4 percent, respectively. The New York City Police Pension submitted this proposal to Documentum, where it garnered a majority vote of 60.3 percent. Despite these large majority votes, the boards of directors of these companies have not informed the funds or their shareholders of their intention to act in accordance with the clear message of the shareholders.

"As stewards of billions of dollars of pension funds for our employees and
retirees, we need corporate executives who are acting in the interest of
shareholders and committed to building long term shareholder value.
Implementing governance reforms that have the support of the majority of
shareholders will help restore investor confidence that corporate leaders
are faithful to their fiduciary duties," stated Martha E. Stark, Commissioner of the Department of Finance.

"Restoring confidence in the nation's financial markets is a precondition for a revival of the American economy. As a trustee on the board of the New York City Employees Retirement System (NYCERS), I am appalled at corporations that continue to ignore the wishes of the majority of shareholders seeking to improve corporate performance and accountability. We seek to ensure that the deferred wages of DC 37 members invested for
their retirement through NYCERS are being used in a way to help restore investor confidence in the nation's financial markets and improve corporate performance and accountability," stated Lillian Roberts, Executive Director, District Council 37, AFSCME, AFL-CIO, and Trustee, New York City Employees Retirement System.

"The Board of Directors represents the shareholders and when the shareholders speak, the Board should listen. The proxy vote is the only opportunity for shareholders, who are the owners, to express their views on how their company should be run. It is fundamental to shareholder rights that the Board pay attention to these votes," said New York State
Comptroller Alan G. Hevesi.

"Too often companies think it's okay to simply ignore the way their shareholders--the real owners of these companies are voting. We're saying it's not okay. It's that type of arrogance that helped Enron lose $20 billion of investors' assets -- losses that hurt the retirements of New York workers and the college education funds for many of their children," said Bruce Raynor, President of UNITE [Union of Needletrades, Industrial and Textile Employees.] "It's outrageous and it's time for it to stop."

"IRRC research shows that the proportion of proposals getting majority support from shareholders has grown dramatically in the last five years. Yet company response has not improved. For example, a record 35 of 41 proposals to declassify the Board received majority support in 2002, yet only three of those companies have made any public response to shareholders following the votes. The fact is, even though companies have the right to ignore precatory proposals, now is not the time to show contempt for the expressed wishes of shareowners through the proxy voting process," said Linda Crompton, President and CEO of IRRC.

Public Advocate Betsy Gotbaum said, "For too long major corporations have ignored the voices of shareholders. As a trustee of the New York City Employees' Retirement System, I applaud Comptroller Thompson for spearheading this campaign for corporate openness that calls attention to the problem and encourages institutional investors to work together for reform in the way corporations respond to shareholder proposals that win majority votes."

"The Sheet Metal Workers National Pension Fund is proud to join with New York City Comptroller William Thompson and the other public and Taft Hartley funds gathered today to call attention to the unresponsiveness of some corporations to shareholders' resolutions that receive majority votes. The SEC and other regulatory bodies need to give institutional investors the tools they need to address these problems. When a substantial percentage of the shareholders of a publicly held corporation seek to promote needed changes in corporate governance and are ignored by the board of directors, regulators must provide an alternative method. Perhaps access to the proxy for substantial shareholders, a minimum of three percent (3 percent) of the outstanding shares who wish to offer an alternative candidate or slate of candidates for the Board of Directors would be a meaningful step. The same or similar threshold could be used to override the no-action process and allow shareholders the opportunity to vote on issues of concern to institutional investors like ourselves," said Benny Hernandez, Chief International of the Sheet Metal Workers Union.

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