In fiscal year 2007-2008, CalSTRS staff voted on 47,481 proxy proposals submitted on the ballots
of 3,813 corporations held in the portfolio. Some companies had multiple meetings, and CalSTRS
staff voted at 4,114 meetings for portfolio companies in total. In addition to the U.S. market,
staff voted in the Canadian, Australian and U.K. markets.
U.S. Proxies
The following is a summary of the major proxy issues voted on in fiscal year 2007-2008.
Election of Directors
CalSTRS generally votes in favor of a director unless the proxy statement shows
circumstances contrary to policy. Circumstances contrary to policy may include:
potential conflict of interest due to other directorships or employment, providing
legal or investment banking advice, and poor board meeting attendance (less than 75%).
VOTED: 16,629
( 56%,
44%)
Selection of Auditors
CalSTRS will vote in favor of the independent auditors recommended by management unless
the auditor provides services that run contrary to what CalSTRS’ policy allows. Such
services may include: consulting, information system design and implementation, investment
banking support, and excessive non-audit fees (greater than 30% of the total fees billed).
VOTED: 2,617
( 88%,
12%)
Compensation Plans
(Stock Option Plans, Employee Stock Purchase Plans, etc.) Companies provide a variety of
compensation plans for executives, employees, and non-employee directors. Many of these plans
provide for the issuance of long-term incentives to attract, reward, and retain key employees.
Compensation plans are evaluated based on CalSTRS Financial
Responsibility Criteria.
VOTED: 1,380
( 37%,
63%)
Approve Merger/Acquisition—Management
CalSTRS votes for acquisition or merger on a case-by-case basis using a total portfolio view.
VOTED: 194
( 85%,
15%)
Corporate Actions/Corporate Governance Issues
These are issues related to spin-offs, incorporation, stock issuance, stock splits, and charter
and by-law amendments. CalSTRS votes on these proposals on a case-by-case basis.
VOTED: 1,237
( 62%,
38%)
Miscellaneous Issues—Management
The most common miscellaneous votes are requests to transact other business or the right to
adjourn meeting to solicit proxies. These issues are voted on a case-by-case basis.
VOTED: 419
( 21%,
79%)
Shareholder Proposals
CalSTRS votes on a variety of shareholder proposals. Votes on proposals include: removing
classified boards of directors, requiring an independent board chairman, eliminating poison
pills, tying compensation plans to company performance, and requiring shareholder approval
for large severance packages. Shareholder proposals are voted on a case-by-case basis.
VOTED: 619
( 73%,
27%)
Non-U.S. Proxies
In fiscal year 2007-2008, CalSTRS staff voted on 24,352 proxy proposals submitted on behalf of 871
non-U.S. corporations held in our equity portfolio. Proposal topics included: election of directors;
ratification of company auditors; ratification of compensation reports; approval of executive and
director compensation plans; and, the approval of mergers and acquisitions.
At this point, we do not have the level of granularity in distinguishing proposals that we have for
the United States. In the foreign markets, proposals are mostly divided as only management and
shareholder proposals.
Management Proposals
CalSTRS votes on management proposals on a case-by-case basis using the guidelines set by the
CalSTRS board.
VOTED: 24,163
( 57%,
43%)
Shareholder Proposals
CalSTRS votes on a variety of shareholder proposals on a case-by-case basis using the
guidelines set by the CalSTRS board.
VOTED: 547
( 16%,
84%)
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