CalSTRS Critical of U.S. Chamber’s Lawsuit Against SEC’s Proxy Access Ruling
The SEC’s ruling enhances corporate value by promoting long-term value.
WEST SACRAMENTO, CA – The California State Teachers’ Retirement System (CalSTRS) today issued the following statement.
CalSTRS wholeheartedly rejects the assertions made by the U.S. Chamber of Commerce and the Business Roundtable in their Sept. 29 lawsuit against the Securities and Exchange Commission’s Aug. 25 proxy access ruling. CalSTRS will explore all possible options, including legal strategies to oppose this action to roll back shareholder rights.
“As an institutional shareholder with a long time horizon, CalSTRS is interested in the long-term growth and success of its portfolio companies,” said CalSTRS Chief Executive Officer Jack Ehnes. “Our ability to change our representatives in the boardroom is fundamental to good corporate governance and shareholder democracy.”
Given the SEC’s provision mandating three percent stock ownership over three years, changes in the boardroom would require broad coalitions of investors who all share the same vision for the company.
“Those companies that are well run and fully engaged have no need to look over their shoulders for shareholder action,” said CalSTRS Director of Corporate Governance Anne Sheehan. “These boards are already doing what we elect them to do: oversee company management on behalf of the shareholders.”
The provisions of the SEC’s proxy access rule are designed to increase long-term shareholders’ ability to place a name on the proxy ballot, they do not guarantee that those names will be approved by a majority of shareholders who represent a wide spectrum of interests.
“The ‘special interests’ the chamber refers to in their lawsuit are, in our case, those of the 848,000 public school educators of California and their retirement security needs,” added Ehnes.
The California State Teachers’ Retirement System, with a portfolio valued at $131.8 billion, is the second largest public pension fund in the United States. It administers retirement, disability and survivor benefits for California’s public school educators and their families from the state’s 1,400 school districts, county offices of education and community college districts.