Institutional Investors’ Full-Page Wall Street Journal Ad Builds Pressure on Tyco, Others to Return to U.S. Soil
Washington, DC – Concerned about loss of shareholder rights and long-term investment returns, a cross-section of U.S.institutional investors, state treasurers and labor unions took out a full-page ad in The Wall Street Journal today urging Tyco and other expatriate companies to “Come Home to America” from their offshore tax havens.
“Ahh, Bermuda,” says the ad. “A nice place for a vacation…but should U.S. companies take legal refuge there?”
The ad comes less than a week before Tyco International shareholders are to vote on a petition to reincorporate the Bermuda-chartered company on U.S. soil and only two days after a leading proxy policy advisor recommended that shareholders vote in favor of the proposal.
“What companies like Tyco really are seeking with their sham offshore mail drops is legal shelter from their own shareholders,” said Sean Harrigan, president of the California Public Employees’ Retirement System. “This ad is intended to demonstrate to shareholders that expatriation has direct, detrimental impacts for investors.”
“Tyco and the others still have much work to do before they restore investor confidence and increase shareholders’ legal rights. The only way for shareholders to truly hold Tyco accountable is for the company to reincorporate in the U.S.,” said American Federation of State, County and Municipal Employees (AFSCME) President Gerald W. McEntee, whose union is sponsoring the Tyco shareholder resolution.
The ad, which appeared in eastern editions of the Journal, noted that offshore incorporation also has economic downsides. Support is building in Congress and in a growing number of states, for example, to prohibit government contracts with expatriate firms.
“This practice of expatriation has direct, detrimental effects on shareholders,” said California State Treasurer Phil Angelides, who is sponsoring just that type of legislation in his state. “It represents – to millions of shareholders – the type of deceptive corporate practice that has shaken the financial markets, harmed taxpayers and pensioners, and damaged our economy.”
On Tuesday, Institutional Shareholder Services (ISS) recommended a vote in favor of the AFSCME resolution, because of its disappointment in the board’s failure to properly assess this very important issue on shareholders’ behalf. ISS is the world’s most influential provider of proxy voting and corporate governance services to 750 institutional investors throughout North America and Europe.
“California’s educators expect accountability from their pension fund and we expect it from the companies we invest in,” said Jack Ehnes, chief executive officer of the California State Teachers’ Retirement System (CalSTRS). “The reincorporation resolution supported by ISS calls for Tyco to step up and give us investors the accountability we need.”
Connecticut State Treasurer Denise L. Nappier, another participant in the ad, agreed: “Companies can no longer turn a deaf ear to this issue. Shareholders rights are at risk when companies incorporate offshore, and potential changes in tax law could reduce even further the perceived advantages of overseas incorporation.”
In addition to several major labor unions, signers on the ad included New York City Comptroller William Thompson Jr. on behalf of the New York City retirement systems and New York State Comptroller Alan G. Hevesi and the New York State Common Retirement Fund.
Click here to see the ad that ran in the East Coast edition of the Wall Street Journal.
For accessible versions of files on this page, contact ADACoordinator@CalSTRS.com.