The pension plan is suing to force AIG to include the plan’s binding proxy access shareholder proposal on its published proxy material and allow shareholders to vote on the matter at AIGs annual meeting in May, according to a press release from the plan. If AIG was forced to concede, the proposal would amend the company’s by-laws so that shareholders would be allowed access in the future to proxy materials to nominate individuals to the company’s board of directors. Shareholders who own 3% of the company’s stock for more than a year would also be able to nominate board candidates, and AIG would have to include such information on its proxy material.
In the fall, the plan filed a proxy access proposal at a number of companies. At Disney, the SEC first decided to allow the inclusion of the proposal, but later reversed its decision (See Funds Appeal SEC Staff Disney Proxy Access Decision ). With AIG, the SEC told AIG that it could omit the proxy access proposal, sparking the lawsuit.
At the moment, only nominations from the current board are put on ballots given to shareholders at AIG, according to the plan. If shareholders want to nominate candidates, the company is not required to mention this on the ballot. The board can also spend unlimited funds to beat any outside nominee, according to the plan.
“We have no choice but to seek relief in the courts because of the current stalemate on proxy access rulemaking at the SEC,” said Gerald McEntee, chairman of the AFSCME Pension Plan, in the news release. “While we hope that (SEC) Chairman (William) Donaldson will be able to craft a meaningful shareholder access rule, the current situation at AIG demands action now. AIGs business practices – now under investigation by the New York Attorney General – put shareholders at risk for significant losses. We have lost faith in the current board dominated by Chairman and CEO Hank Greenberg and company insiders. Proxy access is one way for shareholders to bring fresh leadership to AIG, empowered to set the company on a new path.”
The AFSCME Plan has submitted proposals at 19 companies for the year (See AFSCME Outlines 2005 Shareholder Proposals ). The plan is seeking, among other things, access to annual meeting materials at Halliburton Company (See AFSCME Fund Raises Shareholder Rights Proposal with Halliburton ) and The Walt Disney Company for proposals to increase shareholder power to nominate directors.