AFSCME Urges Public Fund Corp. Governance Activism

November 26, 2002 (PLANSPONSOR.com) - The American Federation of State, County and Municipal Employees (AFSCME) called upon public funds to support initiatives giving shareholders access to proxy statements.

Gerald McEntee, president of AFSCME, said in a letter to 150 public funds that those initiatives would help funds elect directors of their own choosing.

The proposals, half of which are in the form of binding amendments to company bylaws, would:

  • require inclusion on a company’s proxy statement and proxy card the name of one board candidate if nominated by shareholders owning at least 3% of company stock
  • allow for up to a 500-word background statement on the nominee
  • require the nominating shareholders to obey all relevant securities regulations and indemnify the corporation for any failure to comply.

“Excessive executive compensation, manipulated earnings, numerous accounting irregularities and the other scandals that have surfaced in the past year are just symptoms of the larger problem: shareholders have no real voice in the make up of corporate boards,” McEntee said in a statement.Our proposals aim to change that.”

McEntee, who is also chairman of the AFSCME Employees Pension Plan, released a list of 22 companies to whom the plan has submitted shareholder proposals for 2003 annual meetings, more than tripling the union’s 2002 effort.

In addition to enhanced shareholder proxy access, the group seeks corporate governance reforms in executive compensation, reincorporation from tax haven countries, and strategic planning.

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