General Information

The Teachers’ Retirement Board has a fiduciary duty to treat proxy votes as plan assets. This activity serves our core mission of using our vote to enhance shareholder returns and improve the financial markets for all investors.

CalSTRS believes the execution of proxies is an important fundamental shareholder right, and staff always seeks to exercise our rights in a manner consistent with the interests of our beneficiaries, California public teachers. We use our proxy votes to support certain corporate directors or shareholder proposals to introduce necessary changes that will enhance the company’s long-term shareholder value.

Over the course of each year, CalSTRS anticipates voting over 7,800 proxies, with more than half of them being voted during proxy season, which occurs in the months of April, May and June.

When voting proxies, CalSTRS uses analysis and judgment in conjunction with our Corporate Governance Principles. These principles communicate what we believe are corporate governance best practices on topics such as the board of directors, auditors, executive and director compensation, compensation plans and governance structures, and serve as guidelines for our proxy voting.

CalSTRS Proxy Voting Guidelines

The following highlight CalSTRS’ proxy voting guidelines on certain issues.


CalSTRS generally votes in support of a director unless the proxy statement shows circumstances contrary to our Corporate Governance Principles.

Some circumstances that warrant a withhold vote for a director include a potential conflict of interest due to other directorships or employment, providing legal or investment banking advice, overboarding (serving on more than four public boards), poor board meeting attendance (less than 75 percent), or a lack of board independence or a lack of board diversity.


CalSTRS will vote to ratify the independent auditors recommended by management unless the auditor provides services that we believe are a conflict of interest.

Examples of those services include consulting, investment banking support and excessive non-audit fees (greater than 30 percent of the total fees billed).

Compensation Plans

Companies provide a variety of compensation plans, such as stock option plans, restricted stock plans or employee stock purchase plans for executives, employees and nonemployee directors. Many of these compensation plans provide for the issuance of long-term incentives to attract, reward and retain key employees.

CalSTRS evaluates these compensation plans based on their design and other factors, such as the performance metrics, burn rate and dilution potential.


CalSTRS refers to the executive compensation sections of our Corporate Governance Principles when voting the advisory vote on executive compensation, more commonly known as say-on-pay. The say-on-pay vote provides shareholders the opportunity to ratify the compensation of the named executives in the proxy.

CalSTRS generally supports the say-on-pay vote if the company demonstrates a clear alignment between performance and pay and the total executive compensation is a reasonable amount.

Mergers and Acquisitions

When CalSTRS votes for a merger or acquisition, we do so on a case-by-case basis using a total portfolio view. Some considerations are given to the strategic rationale behind the transaction, the sales process, the change in control amount, the price premium or lack of it, the market reaction and the impact on the corporate governance of the surviving entity.

Shareholder Proposals

CalSTRS votes on shareholder proposals, such as sustainability, political contributions and social issues, on a case-by-case basis using our Corporate Governance Principles.

CalSTRS may not support shareholder proposals in instances where the company has demonstrated a willingness to engage with shareholders and/or has shown improved disclosure and transparency in the reporting.

Other Issues

CalSTRS votes corporate actions or corporate governance issues, such as those related to spin-offs, incorporation, stock issuance, stock splits and charter and bylaw amendments, on a case-by-case basis.

Proxy Research

To assist staff in our proxy vote analysis, we subscribe to proxy research from vendors, such as Glass Lewis & Co., Institutional Shareholder Services, Equilar and the Sustainable Investment Institute.

Additionally, CalSTRS frequently has dialogues with corporate issuers and other relevant parties to obtain additional information or perspectives before making a proxy vote decision on key shareholder issues.

Since 2011, CalSTRS has been using the Glass Lewis proxy voting platform to vote domestic and global proxies in-house. CalSTRS uses the Glass Lewis proxy voting platform to efficiently manage our proxy voting so staff can focus on researching and analyzing contentious issues or companies that are important to us.

Corporate Governance staff also manually cast votes on S&P 500 companies as well as mergers, shareholder proposals, contested election meetings and other extraordinary vote items. Furthermore, CalSTRS is committed to disclosing our proxy votes on CalSTRS website at CalSTRS.com