Tag: board diversity

Pension Funds Team Up on Monster Beverage To Call For Board Diversity

Monster

Several public pension funds — including the massive New York State Common Retirement Fund – are calling for energy drink company Monster Beverage to increase the gender and racial diversity on its board.

Three pension funds have filed a shareholder proposal asking Monster to disclose any plans they have to increase the diversity of their board.

More from Pensions & Investments:

The $29.4 billion Connecticut Retirement Plans & Trust Funds, Hartford, $4.3 billion Philadelphia Public Employees Retirement System and Calvert Investments joined the $173.8 billion Albany-based pension fund as co-filers of the proposal.

“It’s unsettling that Monster Beverage has ignored repeated, widespread investor support for increased board diversity,” Thomas P. DiNapoli, New York state comptroller and sole trustee of the New York pension fund, said in the statement. “Company value and board diversity are linked. Businesses that rely on consumers should be particularly mindful that their boards should reflect the men and women who purchase their products. When a board fails to be responsive to its shareholders, it is often symptomatic of larger, systemic problems in the company’s governance.”

Monster directors and executives have been unresponsive to the New York pension fund’s efforts to discuss the issue, said Matt Sweeney, New York State Common spokesman, in an interview.

Monster’s response:

“Diversity is a part of the mix that Monster Beverage Corp.’s board and nominating committee consider when identifying and evaluating candidates for director. In fact, as stated in the company’s public filings, the nominating committee charter specifically includes diversity among the factors to be considered, along with experience, skills, and knowledge of business and management practices.”

The three pension funds collectively hold $57 million worth of Monster Beverage shares.

 

Photo By MrkJohn from Nottingham, England (Monster Troupe) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

CalPERS, New York Pensions Lead Push To Give Largest Shareholders More Control Over Corporate Boardrooms

board room chair

Pension funds are often among a corporation’s largest shareholders, a position that gives them unique ability to influence corporate decision-making and governance.

But a handful of the nation’s largest public pension funds are leading a push for more oversight over corporate governance – namely, the ability to hire and fire a company’s director.

From the New York Times:

Weary of what they see as a dysfunctional dynamic, a band of institutional shareholders is mounting the first push ever at 75 United States companies to allow investors to hire and fire directors directly. The plan is intended to bring greater accountability to corporate boardrooms and eliminate some of the “clubby” aspects for which they have been criticized.

Leading the drive is Scott M. Stringer, the New York City comptroller and a Democrat, who oversees five municipal public pension funds with $160 billion in assets — much of it invested in the kinds of companies his effort will target. His office will submit a proposal at each of the 75 companies, asking the company to adopt a bylaw allowing shareholders who have owned at least 3 percent of its stock for three years or more to nominate directors for election to the board.

Among the 75 companies targeted by Mr. Stringer are eBay, Exxon Mobil, Monster Beverage and Priceline. None of the companies commented on the comptroller’s shareholder proposal.

[…]

“The bottom line is, friends still put friends on boards,” Mr. Stringer said in an interview Wednesday. “My job as a long-term investor is to make sure that these companies truly represent the interest of share owners.”

The effort by the New York City pension funds will focus on companies that have been unwilling to change practices in three areas: board diversity, climate change and executive compensation. Companies with no women as directors or those with little or no ethnic diversity were identified, along with companies whose shareholders had recently expressed dissatisfaction with executive pay practices but had done nothing to address them. On climate change, more than a third of the companies identified by the shareholder group are in the energy industry.

The proposals will be put to shareholder votes at the companies’ annual meetings in the coming months. While the companies would not be required to adopt the bylaw even if a majority of shareholders voted for it, advocates say the boards would be more likely to go along with the idea if it won strong support from shareholders.

Scott Stringer is leading the charge, but he has other powerful pension funds on board, including CalPERS. From the NY Times:

Working with Mr. Stringer’s office to drum up support are officials at the California Public Employees’ Retirement System, the nation’s largest public pension fund. Calpers said it would hire a proxy solicitor to discuss the proposal with other institutional shareholders. “We view this as a five-year project and will be back again and again as needed,” said Anne Simpson, senior portfolio manager and governance director at Calpers. “But making the commitment and getting an alliance formed on this issue is so important.”

Public pension overseers in other states, including Connecticut, Illinois and North Carolina, are also supporting the effort.

Pension360 covered last week how CalSTRS, CalPERS and New York’s largest pension systems were upset over governance changes at Bank of America.