Statement by CalSTRS and Other Institutional Investors
on Marsh & McLennan's Decision to Add an Independent Director to its Board of Directors

News release

Marsh & McLennan Companies, Inc. announced today that it is adding Zachary Carter to the slate of nominees for election to its board of directors at its May 20, 2004 annual meeting. A group of institutional investors, AFSCME Employees Pension Plan, New York State Common Retirement Fund, California Public Employees’ Retirement System and the California State Teachers’ Retirement System, praised the move and announced they were withdrawing their proxy resolution.

In December, the investor group, which together holds about 6.85 million shares, worth about $320,000,000 or about 1.3 percent of the company, filed a shareholder proposal that sought access to the proxy to nominate and elect independent directors not picked by management. Thereafter, the investors and MMC management entered a constructive dialogue. The investors recommended that the company should add an independent director to its board. Management said that it continually considers qualified candidates and welcomes suggestions from shareholders about the company, its governance, and other matters of mutual concern. The investor group identified several possible candidates for the board. MMC nominated Mr. Carter and recommended to shareholders that he be elected.

“Marsh & McLennan today demonstrated clearly that it is responsive to its shareholders and determined to put to rest any investor concerns about its Putnam mutual fund subsidiary. This bold step tells investors that management is working to keep our company growing and moving in the right direction,” said New York State Comptroller Alan G. Hevesi, sole trustee of the New York State Common Retirement Fund. “Mr. Carter is an excellent choice. He is a brilliant lawyer with a long and distinguished career of public service. He will bring important expertise and experience that can only help MMC.”

“As a new independent director, Mr. Carter strengthens the board by making it more accountable and sensitive to shareholder concerns,” said Gerald W. McEntee, AFSCME Employees Pension Plan Chairman.

“CalPERS applauds the action of Marsh & McLennan’s board to nominate an independent director. We are impressed that Marsh & McLennan has taken this step. This nomination, in and of itself, should encourage investors to have confidence in MMC and its board,” said CalPERS Board President Sean Harrigan

“We hope other companies follow Marsh & McLennan’s lead, acting on shareholders’ desire for increased board independence,” said Jack Ehnes, chief executive officer of CalSTRS. “Only through improved shareholder democracy can we ensure the true owners of the company are heard in the board room.”

MMC will also be including in its proxy statement new procedures institutionalizing investor input on selecting future nominees to its board. These will provide a mechanism for a constructive dialogue between management and investors on one of the most important issues, the make up of the Board.