CalSTRS, CalPERS Urge UnitedHealth to Respond to Landmark Investor Vote for Proxy Access

News release

 Sacramento, CA  – The nation’s two largest public pension funds today called on UnitedHealth Group to respond to owners of $28 billion in stock who voted for a proposal seeking investor access to board election ballots.

At the company’s annual meeting today, the resolution by the California Public Employees’ Retirement System (CalPERS) received 42.2 percent of all votes cast — among the highest percentages of any shareowner proposal this year.

The vote was supported by the California State Teachers’ Retirement System (CalSTRS) which also joined CalPERS in backing a similar proxy access proposal at Hewlett Packard that received 39 percent in March.

“The votes at these big companies are too large and the message is too loud for companies and regulators to ignore,” said Russell Read, CalPERS Chief Investment Officer. “Almost half of the shareowners who voted cast a vote against management. Clearly, our message resonated, and we urge the company to adopt proxy access immediately. We also appeal to the U.S. Securities and Exchange Commission to recognize investors’ desire for a rule on proxy access – not just at UnitedHealth, but for all shareowners that the SEC is directed to protect.”

“What this result says to us and should say to companies as well is: Both courts and shareholders see proxy access and the director election process in the U.S. as core and continuing principles in the ownership triangle,” said Christopher J. Ailman, CalSTRS Chief Investment Officer. “It is unfortunate that shareholders have to use a foot-soldier approach to advance these issues, but the strong showing at both UNH and HP is very gratifying. We’ll be back.”

The resolution would have qualified owners who have held at least 3 percent of the company’s stock for over two years to nominate two directors to management’s election ballots. It was opposed by company management, which instead offered a plan to poll shareowners on potential candidates without guaranteeing their nomination.

Supporters including major proxy advisory services said proxy access is needed to give shareholders meaningful choices among candidates who now serve self-perpetuating boards where incumbents select nominees and decide whether to re-nominate themselves.

Few candidates whom shareowners propose for company nomination slates ever get on the ballot under current rules, and nominations of alternative candidate slates are prohibitively time-consuming and expensive.

“The real message United Health should glean from this vote is that shareowners wanted more than their own hand-picked committee to nominate directors. Their idea of a committee that they controlled was not enough to restore confidence. It was not well received or satisfactory to the shareowners, since nearly half of all shareowners expressed a preference for access to the proxy for nominations,” Read said.

Noting this is the second company in which the concept of access to the proxy gained significant support, Read said “I hope this gives the SEC what it needs to appreciate the type of protection shareowners desire. It is indisputable that this concept has a place in Corporate America. Giving significant investors access to corporate proxy ballots will improve board performance, raise investor confidence, and produce greater share value,” Read said.

For the first time in a proxy campaign, CalPERS and CalSTRS launched a Web site where UnitedHealth shareowners could learn more about the importance of the proposal, proxy access, and the problems at the company.

CalPERS has 6.4 million UnitedHealth shares and total assets of approximately $245 billion, and provides retirement and health benefits to approximately 1.5 million State and local public employees and their families.

CalSTRS has 5.5 million UnitedHealth Group shares and more than $168 billion in its investment portfolio. CalSTRS provides retirement, disability and survivor benefits to California’s 800,000 public school kindergarten through community college educators and their families.

For more information, visit

CalSTRS provides retirement, disability and survivor benefits to California’s nearly 800,000 public school educators and their families. Its investment portfolio currently exceeds $168 billion.