General Information

In fiscal year 2014-15, the total number of proposals increased slightly by 3.7 percent compared to 2013-14, while the total number of meetings voted on was not significantly different.

The number of proposals for domestic proxies in 2014-15 decreased slightly by 1.2 percent compared to 2013-14 while the number of U.S. meetings was not significantly higher for the same time period.

In contrast, the total number of proposals on foreign proxies was 6.3% higher in 2014-15 than in 2013-14 while the number for foreign meetings voted on decreased slightly by 1.1 percent.

For domestic proxies, there was a decline in certain traditional governance issues, such as board declassification, while there was increased activity in other governance issues, such as proposals regarding the right to act by written consent, the right to call a special meeting or the right to nominate directors at U.S. public companies (proxy access). In fact, proxy access was the dominant governance issue this proxy season and significantly contributed to the increase in the governance proposals voted in 2014-15 as it made up more than 28 percent of the governance proposals compared to 6 percent in 2013-14.

The significant increase in proxy access proposals was due to the New York City Comptroller of New Your City Pension Funds submitting 75 proxy access proposals to companies as part of it Board Accountability Project. Other investors also submitted proxy access proposals at other companies.

CalSTRS supported 83, or approximately 95 percent, of the 87 access proposals in 2014-15, primarily because these proposals were modeled after the Securities and Exchange Commission’s original proxy access proposal, which allowed an investor or a group of investors holding an aggregate of three percent or more of the company’s shares for three or more years, the right to nominate director candidates on the proxy.

In 2014-15, there was a decrease in social proposals while there was an increase in compensation-related proposals as shareholders appeared to have continued interest in limiting executive compensation or potential excessive change-in-control benefits (golden parachutes). The decrease in social proposals was primarily due to a decrease in political contributions and lobbying proposals as more companies have increased their disclosure of political and lobbying expenditures over the past years since the Supreme Court decision in Citizens United vs. Federal Election Commission.

Lastly, 2014-2015 also saw an increase in environmental proposals as fossil fuel and sustainability risks remained a high concern for shareholders.

Overall, staff believes the market, as a whole, is showing improved governance. However, some companies remain outliers by retaining large pay packages or archaic governance practices. Staff continues to monitor the portfolio and vote all proxies in accordance with the CalSTRS Corporate Governance Guidelines approved by the Board.

For accessible versions of files on this page, contact