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Comptroller William C. Thompson Jr., on behalf of the City's five pension funds and joined by leaders from four other public pension funds, has asked Securities and Exchange Commission Chairman William H. Donaldson to reconsider the SEC's issuance of no-action letters on six proxy proposals submitted by the AFSCME Employees Pension Plan.

"We consider such inaction to be little more than a pocket veto by the Commission," reads a letter sent to Chairman Donaldson. "Moreover, such inaction will raise further questions about the Commission's commitment to expanding the rights of shareholders and facilitating tools they can use to protect their investments."

Last November, AFSCME submitted shareholder proposals to AOL Time Warner, Bank of New York, Eastman Kodak, Sears Roebuck, Citigroup, and ExxonMobil. The advisory proposal sent to the first three companies asked their Boards of Directors to establish protocols to allow shareholders to nominate directors through the use of the companies' own proxy statements and proxy cards. Currently, shareholders may not nominate directors to be included on the three companies' proxy materials. A similar, but binding, proposal was sent to the latter three companies; if passed, it would amend those companies' bylaws.

The SEC has jurisdiction over proxy filings and shareholder proposal rules. The release of the non-binding advisory letters - known as no-action letters - is the first step in a shareholder proposal review process and informs corporations that the SEC will not pursue any enforcement action if a shareholder proposal is omitted from the corporation's proxy materials.

In addition to Thompson, the letter was signed by Sean Harrigan, President of the Board of Administration from the California Public Employees Retirement System; Denise L. Nappier, Connecticut State Treasurer; Jay B. Rising, Michigan State Treasurer, and Keith Johnson, General Counsel from the State of Wisconsin Investment Board. The five represent pension funds holding several hundred billion dollars.

In the letter, the leaders stressed the importance of maintaining a united front on issues concerning shareholder rights and corporate governance.

"This is an issue that is of critical importance to shareholders and to the integrity of our system of corporate governance," the letter reads. "We consider the handling of the Plan's proxy access proposal to be a real test of your leadership in the shareholder rights arena."

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