CalSTRS ‘Poison Pill’ Resolution Gets Support of Proxy Advisory Firms
Resolution gives shareholders the right to approval the company's poison pill
SACRAMENTO, CA -A resolution proposed by the California State Teachers’ Retirement System (CalSTRS) at Ball Corporation (NYSE: BLL) warrants shareholder support, according to two leading proxy advisory firms.
ISS Proxy Advisory Services and Glass, Lewis & Co., each recommend a FOR vote for the CalSTRS resolution which, if adopted at Ball Corporation’s annual meeting on April 27 in Broomfield, Colo., would require that any poison pills adopted by the company be ratified by shareholders within 12 months.
ISS’ analysis states that “poison pills insulate management from the threat of a change in control. They provide a target’s board with veto power over takeover bids that may be in shareholders’ best interests.”
Glass Lewis said that poison pills are generally “not conducive to good corporate governance. Specifically, they can reduce management accountability by substantially limiting opportunities for corporate takeovers.”
CalSTRS presented the same proposal in 2010, receiving more than 70 percent of the votes of shareholders and is resubmitting since the board failed to implement the will of the shareholders.
“It’s a matter of good governance that any pill or modification to a pill be ratified by shareholders of the company as a way to increase management accountability,” said Anne Sheehan, CalSTRS director of corporate governance.
The California State Teachers’ Retirement System, which owns more than 1.8 million shares of Ball Corp., has a $150 billion portfolio and is the largest teacher pension fund in the United States. It administers retirement, disability and survivor benefits for California’s 852,000 public school educators and their families from the state’s 1,600 school districts, county offices of education and community college districts.