CalSTRS Supports S&P Action to Bar Multi-Class Share Companies from Index

Statement Michelle Mussuto
Anne Sheehan

WEST SACRAMENTO, Calif. (Aug. 4, 2017) – CalSTRS Director of Corporate Governance Anne Sheehan issued the following statement in response to S&P Dow Jones Indices decision this week to not include companies with multi-class shares in the S&P Composite 1500®.

“We are very pleased by S&P’s decision because it reflects the view of investors that dual and multi-class share structures eliminate a core corporate governance principle—one share, one vote.

“CalSTRS has long been concerned about the growing number of companies with dual class share structures and disparate voting rights. We do not believe these types of governance structures are in the long-term interest of shareholders. This step by S&P, developed in consultation with their clients, represents the first major pushback against these types of governance structures. CalSTRS is hopeful this action will give pause to companies thinking about adopting these structures as they contemplate an IPO.

“CalSTRS supports the one share, one vote principle aligning a shareholder’s voting rights with economic interests.”

Anne Sheehan
CalSTRS Director of Corporate Governance

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“CalSTRS supports the one share, one vote principle which aligns a shareholder’s voting rights with their economic interests. We will continue to advocate for one share, one vote structures. CalSTRS believes improvements in governance will augment long-term value creation for us as shareholders with liabilities that stretch over 30 years— benefit payments to our beneficiaries, including more than 914,000 of California’s educators.”

About CalSTRS

The California State Teachers’ Retirement System, with a portfolio valued $208.7 billion as of June 30, 2017, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans. CalSTRS also provides disability and survivor benefits. CalSTRS serves California’s more than 914,000 public school educators and their families from the state’s 1,700 school districts, county offices of education and community college districts. 

See how CalSTRS demonstrates its strong commitment to long-term corporate sustainability principles in its annual Global Reporting Initiative sustainability report: Global Stewardship at Work.

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