Shareholder Proposals

General Information

Core Governance Principles

CalSTRS votes on a variety of governance related shareholder proposals. Examples of the issues voted on include: removing classified boards of directors, requiring an independent board chairman, eliminating poison pills, majority voting in director elections, the right to call special meetings, the right to act by written consent, and requiring shareholder approval for large severance packages. Shareholder proposals relating to core governance rights are almost always supported.

  • Number Voted: 303
  • Voted For: 285 (94%)
  • Voted Against: 18 (6%)

Compensation Issues

Shareholder proposals on compensation issues cover a wide range of topics including retaining bonuses, pay for performance, tax gross-ups and death-benefit packages (golden coffins). Compensation proposals are evaluated based on CalSTRS Corporate Governance Principles.

  • Number Voted: 92
  • Voted For: 58 (63%)
  • Voted Against: 34 (37%)

Social Proposals

Shareholder proposals relating to social issues such as animal rights, human rights, healthcare, and diversity are evaluated on a case-by-case basis.

  • Number Voted: 39
  • Voted For: 10 (26%)
  • Voted Against: 29 (74%)

Environmental Proposals

Shareholder proposals relating to environmental issues such as sustainability, greenhouse gas emissions, renewable energy policy and hydraulic fracturing are evaluated on a case-by-case basis.

  • Number Voted: 90
  • Voted For: 43 (48%)
  • Voted Against: 47 (52%)

Political-related Proposals

Shareholder proposals relating to political activities are evaluated case-by-case basis based on the CalSTRS Corporate Governance Principles.

  • Number Voted: 72
  • Voted For: 49 (68%)
  • Voted Against: 23 (32%)

Miscellaneous Issues

The most common miscellaneous shareholder proposals relate to succession planning, capital allocation and company specific issues. These issues are voted on a case-by-case basis.

  • Number Voted: 19
  • Voted For: 12 (63%)
  • Voted Against: 7 (37%)

2014-15 Shareholder Proposals

The following chart illustrates the type and volume of the major shareholder proposals that staff considered during fiscal year 2014-15. 

2014-15 Shareholder Proposals: Compensation 15%; Environmental 15%; Independent Chair 10%; Declassify Board 2%; Majority Voting Directors 2%; Redeem Poison Pill 1%; Written Consent 6%; Right to Call Special Meeting 3%; Proxy Access 14%; Simple Majority Voting 2%; Other - Corporate Governance 9%; Other - Miscellaneous 3%; Political Contributions 12%; Other Social 6%

Shareholder Proposal Yearly Comparison

A year-over-year analysis was also done that compared the number of proposals considered during fiscal year 2014-15 against the number of similar proposals considered during the last seven years.

Shareholder Proposal Yearly Comparison: 2008-09 Majority Vote 51, Compensation 158, Declassify Board 71, Environment 50; 2009-10 Majority Vote 67, Compensation 149, Declassify Board 45, Environment 56; 2010-11 Majority Vote 37, Compensation 46, Declassify Board 38, Environment 77; 2011-12 Majority Vote 37, Compensation 65, Declassify Board 47, Environment 52; 2012-13 Majority Vote 30, Compensation 95, Declassify Board 36, Environment 47; 2013-14 Majority Vote 31, Compensation 75, Declassify Board 18, Environment 69; 2014-15 Majority Vote 13, Compensation 92, Declassify Board 13, Environment 90

An interesting trend is the decline in shareholder proposals relating to traditional governance issues, such as board declassification, as many large companies have already adopted this practice. The mandatory introduction of say-on-pay in 2011 initially appeared to reduce the number of compensation-related shareholder proposals.

However, after declining in 2010-11, compensation-related shareholder proposals have increased again over the past years as shareholders appear to have renewed focus on restricting the executive compensation, recouping unearned bonuses and limiting accelerated vesting of unearned equity awards in the event of a change-in-control (golden parachutes).

There were substantially more environmental-related proposals in 2014-15 compared to 2013-14 as shareholders showed more interest in climate change, greenhouse gas emission reduction and reporting, energy efficiency and renewables, and the formation of an environmental or social committee.

As for social proposals, those focusing on political contributions and lobbying decreased from 94 to 72 proposals over the past fiscal year. The number of proposals on other social issues was relatively unchanged from 41 to 39 over the same time period.

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