View 2005 Shareholder Report

Comptroller William C. Thompson, Jr. today announced the results of the most extensive – and successful- shareholder proxy season ever by the New York City Pension Funds.

During the 2005 shareholder season , Thompson submitted shareholder resolutions covering 23 different issues on behalf of the five Pension Funds. Of that number, proposals on 15 social and environmental issues were submitted to 72 companies and proposals on eight corporate governance issues were submitted to 33 companies.

Of those, 43 companies either adopted the proposals or otherwise satisfied the proposals’ request, compared to only 10 companies last season, representing a 430% increase in successful proposals.

“This past season, the New York City Pension Funds launched their most comprehensive shareholder proposal campaign to date urging many of America’s largest companies to adopt important corporate governance reforms, improve conditions for workers, and strengthen their human rights policies,” Thompson said. “I am proud that our Funds have taken the lead on these important issues and that our efforts have achieved significant outcomes of proposal adoptions and majority votes at a number of companies. These reforms will enhance the long-term interests of the companies and their shareholders.”

"Companies with good corporate governance produce solid earnings for investors like the New York City pension funds. I am pleased that our shareholder resolution program sparked a record year of positive changes. It's good for the companies, good for shareholders and good for our employees and retirees,” said New York City Department of Finance Commissioner Martha E. Stark, a trustee on four of the city’s boards and chair of the New York City Employees’ Retirement System and Teachers’ Retirement System.

“By working so effectively to push companies towards stronger corporate governance and greater social and environmental responsibility, the New York City Pension Funds have not only ensured that shareholders get the best possible return on their money but also contributed to a better world,” said Public Advocate Betsy Gotbaum. “Companies that support corporate accountability, respect human rights, and protect the environment make for better long-term investments.  I fully expect the Pension Funds to build on this impressive record in the year ahead.”  

Corporate Governance

This past season, the City’s corporate governance proposals included measures to repeal the classified structure of corporate boards in order to improve director accountability to shareholders, and to remove the structure’s impeding effect on unsolicited mergers and acquisitions and potential value enhancement.

The Pension Funds additionally encouraged companies – including many in the Fortune 500 – to support proposals to establish an engagement process between the boards of directors and proponents of shareholders’ that win majority votes, increased independence for members of key board committees, the adoption of a policy requiring shareholder ratification of the appointment of an independent auditor, and to establish an office enabling direct communication between non-management directors and shareholders.

Among the successes:

• A proposal to repeal the classified board and elect all directors annually won majority votes at four companies: BEA Systems, Icos Corp., Charles Schwab Corp., and Newell Rubbermaid. In response to the majority vote, Charles Schwab Corp. agreed to include a management proposal in the 2006 proxy statement requesting shareholder approval to declassify the board of directors.
  
• Four companies - Advanced Neuromodulation Systems, Global Industries, Unisys Corp., WebMD Corp. - adopted a proposal seeking the adoption of a policy requiring shareholder ratification of the appointment of an independent auditor.
  
• The boards of directors of Amerada Hess and Unocal committed to adopt additional measures to existing arrangements, thus fully satisfying the standards urged by a proposal asking companies to establish an office of the board of directors to enable direct communications between non-management directors and shareholders.

Social and Environmental Responsibility

This past season, social responsibility initiatives included proposals seeking improvements in global workplace conditions, fighting employment discrimination, protection of labor and human rights, and protection of the environment, including a proposal asking companies to disclose how they are assessing and mitigating climate change risk.

Among the successes:

• The boards of directors at Aon, Cooper Cameron, General Electric, and Halliburton agreed to comply with a proposal urging companies to reassess their business operations in countries that are designated by the U.S. State Department as “state sponsors of terrorism”.
  
• Agreements were reached with Best Buy, General Mills and Fluor Corporation on a proposal asking companies to commit to full implementation of the International Labor Organization human rights standards in their international production facilities, and to independently monitor compliance with the standards.
  
• A proposal that requested companies to make all possible lawful efforts to implement the nine MacBride Principles was adopted in Northern Ireland by Alberto Culver.
  
• A proposal seeking the adoption of an explicit prohibition against discrimination based on sexual orientation was submitted to 16 companies:Alcoa, Allehheny Energy, Reliant Energy, Dana Corp., BB&T Corp., Owens-Illinois, Echo Star Communications, Coventry Health Care, Harrah’s Entertainment, Universal Health Services, Fischer Scientific Int’l, Advance Auto Parts, Land America Financial Group, U.S. Steel, Alltel, and ExxonMobil.
• Ten companies - Alcoa, Reliant Energy, Dana Corp., BB&T Corp., Owens-Illinois, Coventry Health Care, Harrah’s Entertainment, Fischer Scientific International, U.S. Steel and Alltel – agreed with a proposal to incorporate a prohibition on discrimination based on sexual orientation in their Equal Employment Opportunity (EEO) policies.
  
• Toys “R” Us and the Cerner Corporation agreed to the Funds’ proposal that they adhere to the Equality Principles, a 10-point code of conduct aimed at advancing workplace equality by barring discrimination based on sexual orientation and gender identity.

The trustees for the five Pension Systems are:

New York City Fire Department Pension Fund: Mayor Michael Bloomberg; New York City Fire Commissioner Nicholas Scoppetta (Chair); New York City Finance Commissioner Martha E. Stark; Stephen Cassidy, President, James Slevin, Vice President, Robert Straub, Treasurer, and John Kelly, Brooklyn Representative and Chair, Uniformed Firefighters Association of Greater New York; Peter Gorman, President and Captains' Rep., Nicholas J. Visconti, Chiefs' Rep., and Stephen J. Carbone, Lieutenants' Rep., Uniformed Fire Officers Association; and, Joseph Gagliardi, Marine Engineers Association.

New York City Police Pension Fund: Mayor Michael Bloomberg; New York City Finance Commissioner Martha E. Stark; New York City Police Commissioner Raymond Kelly (Chair); Patrick Lynch, Patrolmen's Benevolent Association; Michael Palladino, Detectives Endowment Association; Edwin Mullins, Sergeants Benevolent Association; Anthony Garvey, Lieutenants Benevolent Association; and, John Driscoll, Captains Endowment Association.

New York City Employees' Retirement System: New York City Finance Commissioner Martha E. Stark (Chair); New York City Public Advocate Betsy Gotbaum; Borough Presidents C. Virginia Fields (Manhattan), Helen Marshall (Queens), Marty Markowitz (Brooklyn), Adolfo Carrion (Bronx), and James Molinaro (Staten Island); Lillian Roberts, Executive Director, District Council 37, AFSCME; Roger Toussaint, President Transport Workers Union Local 100; and, Carroll (Carl) Haynes, President, International Brotherhood of Teamsters, Local 237.

New York City Teachers' Retirement System: New York City Finance Commissioner Martha E. Stark (Chair); Deputy Chancellor Kathleen Grimm, New York City Department of Education; and, Sandra March, Melvyn Aaronson and Mona Romain, all of the United Federation of Teachers.

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