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New York City Comptroller William C. Thompson, Jr., on behalf of the City’s five Pension Funds, has submitted shareholder proposals calling on five companies to repeal classified Boards of Directors and establish that all directors be elected annually.

“We believe that the ability to elect directors is the single most important use of the shareholder franchise,” Thompson said in the proposals’ supporting statement. “Directors should be accountable to shareholders on an annual basis.”

“The election of directors by classes, for three-year terms, minimizes accountability and precludes the full exercise of the rights of shareholders to approve or disapprove annually the performance of a director or directors,” he wrote. Additionally, “Classified boards could frustrate, to the detriment of long-term shareholder interest, the efforts of a bidder to acquire control or a challenger to engage successfully in a proxy contest.”

The proposals were filed recently on behalf of the New York City Employees’ Retirement Fund (NYCERS), Teachers’ Retirement System (TRS), New York City Police Pension Fund, New York City Fire Department Pension Fund, and Board of Education Retirement System (BERS).

The proposals were submitted, for the first-time, to: BEA Systems, Inc. of San Jose, CA; Icos Corp. of Bothell, WA; Charles Schwab Corp. of San Francisco, CA; and, Newell Rubbermaid, Inc. of Atlanta, GA.

A proposal also was submitted to Goodyear Tire & Rubber Company of Akron, OH. In 2002, NYCERS submitted a similar proposal that received a majority vote. This year’s proposal was withdrawn last month month after discussions with the company and an agreement that a management proposal to declassify its board of directors would appear on the proxy.

Additionally, NYCERS resubmitted a proposal with Saks Inc. of Birmingham, AL. Last year, the proposal was supported by a majority of the votes cast, but the company has not agreed to carry out the will of the shareholders. Consequently, this year the City’s four other funds submitted a resolution proposing a protocol establishing an engagement process with the proponent of the resolutions that receive majority votes and examination of the proposal by an independent board committee.

The funds collectively have: 1.2 million shares valued at more than $9.6 million in BEA; 152,000 shares valued at more than $3.9 million in Icos; 1 million shares valued at more than $23.8 million in Newell; 387,000 shares valued at more than $5.5 million in Saks; and, 3.6 million shares valued at more than $41 million in Schwab.

The trustees of the city’s five pension boards are:

New York City Fire Department Pension Fund: Comptroller Thompson, 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: Comptroller Thompson; Mayor Bloomberg; Commissioner 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.

NYCERS: Comptroller Thompson; Commissioner 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.

TRS: Comptroller Thompson; Commissioner 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.

BERS: Schools Chancellor Joel Klein, Alan Aviles, Phillip Berry, David Chang, Tino Hernandez, Souza Kappner, Richard Menschel and Marita Regan; Borough President appointees Jesse Mojica (Bronx), Martine Guerrier (Brooklyn), Jacquelyn Kamin (Manhattan), Michael Flowers (Queens) and Joan Correale (Staten Island); and employee members Thomas J. Malanga, International Union of Operating Engineers, Local 891, and Milagros Rodriguez of District Council 37, Local 372.