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Washington, DC – Concerned about loss of shareholder rights and
long-term investment returns, a cross-section of U.S. institutional investors,
state treasurers and labor unions took out a full-page ad in USA Today
on Tuesday (May 27) urging Ingersoll-Rand to "Come Home to America"
from its off-shore tax haven in Bermuda.
"Ingersoll-Rand, with hundreds of millions of dollars in defense
and homeland security contracts, operates from a mailing address on the
sandy shores of Bermuda," the ad reads. "That’s bad for
shareholders."
The advertisement, which appears in USA Today editions in New York and
Los Angeles, notes that other companies like Tyco and McDermott International
have agreed to review their decision to move their official headquarters
to an off-shore post office address. "Why not Ingersoll-Rand?"
The ad comes two days before Ingersoll-Rand shareholders are to vote
on a resolution calling on management to reincorporate the Bermuda-chartered
company on U.S. soil. It follows last week's decision by the nation's
leading proxy policy advisor to recommend that shareholders vote in favor
of the proposal.
Institutional Shareholder Services, the largest proxy advisory firm in
the country, says “the company has not yet conducted a meaningful
analysis in assessing the risks associated with remaining incorporated
in Bermuda.”
Pointing to pending federal legislation rolling back off-shore tax dodges
and to "a tidal wave" of state legislation around the country
to ban contracting with expatriate American companies, ISS added: "Given
Ingersoll-Rand's unique lines of business, this could serve as a significant
blow to the company's revenue stream."
"Shareholders lose significant accountability when American companies
flee from the United States to Bermuda and other off-shore tax shelters,
” said Gerald W. McEntee, chair of the AFSCME Employees’ Pension
Plan, and sponsor of the shareholder resolution. “Ingersoll-Rand
and other companies argue that they go off-shore for economic reasons,
but that is clearly not the case. That's especially important given the
substantial loss of shareholder rights that goes with off-shore incorporation."
The ad reinforces that point: "For example, under Bermuda law, officers
and directors are accountable only to the corporation, putting shareholders
at the bottom of the accountability pyramid, rather than at the top as
in the U.S. And directors and officers are not required to disclose to
shareholders their personal interests in corporate contracts or transactions."
"Ingersoll-Rand set up a sham off-shore mail drop while it actually
runs the company from New Jersey," said Jack Ehnes, chief executive
officer of the California State Teachers' Retirement System, one of the
sponsors of the ad and a supporter of the reincorporation resolution.
"We've asked Ingersoll-Rand to reconsider their reincorporation,
but they're not listening. They owe it to their shareholders to listen
to us, to ISS and to other more enlightened companies."
Those signing the ad included many of the nation's largest institutional
investors: California State Teachers’ Retirement System, California
Public Employees’ Retirement System and California State Treasurer
Phil Angelides; Connecticut State Treasurer Denise L. Nappier and Connecticut
Retirement Plans and Trust Funds; New York City Comptroller, William C.
Thompson, Jr. on behalf of the New York City retirement systems; New York
State Comptroller Alan G. Hevesi, and the New York State Common Retirement
Fund; and the American Federation of State, County and Municipal Employees
and the American Federation of Labor and Congress of Industrial Organizations.
Click here to view the ad
that appears in Tuesday's LA and NY editions of USA Today.
For more information, you also may contact any of the following:
American Federation of State County and Municipal Employees
Cheryl Kelly (202) 429-1145 ckelly@afscme.org
California State Teachers' Retirement System
Sherry Reser (916) 229-3258 sreser@calstrs.com
California Public Employees' Retirement System
Brad Pacheco (916) 326-3991 brad_pacheco@calpers.ca.gov
Connecticut State Treasurer's Office
Bernard Kavaler (860) 702-3277 Bernard.Kavaler@po.state.ct.us
California State Treasurer's Office
Mitchel Benson (916) 653-4052 Mbenson@treasurer.ca.gov
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