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 and the right to act by written consent. Shareholder proposals relating to core governance rights are almost always supported.

  • Number Voted: 257
  • Voted For: 247 (96%)
  • Voted Against: 10 (4%)

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: 69
  • Voted For: 42 (61%)
  • Voted Against: 27 (39%)

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: 38
  • Voted For: 11 (29%)
  • Voted Against: 27 (71%)

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: 87
  • Voted For: 40 (46%)
  • Voted Against: 47 (54%)

Political-related Proposals

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

  • Number Voted: 78
  • Voted For: 43 (55%)
  • Voted Against: 35 (45%)

The following chart illustrates the type and volume of the major shareholder proposals that staff considered during 2015-16.

2015-16 Shareholders Proposals: Compensation 13%; Environmental 16%; Independent Chair 9%; Declassify Board 1%; Majority Voting, Directors 4%; Redeem Poison Pill 0%; Written Consent 3%; Right to Call Special Meeting 3%; Proxy Access 16%; Simple Majority Voting 2%; Other - Corporate Governance 7%; Other - Miscellaneous 5%; Political Contributions 14%; Other Social 7%
Shareholder Proposal Yearly Comparison: 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 91, Declassify Board 13, Environment 90; 2015-16 Majority Vote 22, Compensation 69, Declassify Board 7, Environment 87

Above, the chart shows a year-over-year analysis comparing the number of proposals considered during 2015-16 against those of similar proposals over the past six fiscal years.

  • An interesting trend is the decline in the number of shareholder proposals related to traditional governance issues, such as board declassification. Reasons for such a decline may be attributed to increased shareholder engagements or many large companies already adopting these governance best practices.
  • The mandatory introduction of say-on-pay in 2011 initially appeared to reduce the number of compensation-related shareholder proposals. After declining in 2010-11, compensation-related shareholder proposals increased again over the past years as shareholders appeared 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). However, the number of compensation-related shareholder proposals filed at companies decreased slightly in 2015-16 compared to 2014-15.
  • The number of environmental-related shareholder proposals in 2015-16 remained relatively unchanged compared to 2014-15. Shareholders continued to maintain interest in climate change, greenhouse gas emission reduction and reporting, energy efficiency and renewables, sustainability reporting and the formation of the environmental or social committee.
  • As for social shareholder proposals, those focusing on political contributions and lobbying increased slightly from 72 to 78 proposals in 2015-16, however, the number of other social-related proposals was relatively unchanged from 38 to 41 over the same time period.

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