2015 Special Report: Public Pension Funds' Shareholder-Proposal Activism

America's largest publicly traded companies are facing more shareholder proposals in 2015, driven principally by a �proxy access� campaign led by New York City Comptroller Scott Stringer, who oversees the city's $160 billion pension funds for public employees.[3] Elected in 2013, Stringer has launched a Boardroom Accountability Project seeking, in part, proxy access, which grants shareholders with a certain percentage of a company's outstanding shares the right to list a certain number of candidates for the company�s board of directors on the company�s proxy statement.[4] As noted in an earlier finding, Comptroller Stringer�s proxy-access campaign has won substantial shareholder support at most companies where his proposal was introduced.

Although it is too soon to assess the impact of Comptroller Stringer's push for proxy access, we can evaluate shareholder-proposal activism by state and municipal public employee pension funds in previous years. From 2006 to the present, state and municipal pension funds have sponsored 300 shareholder proposals at Fortune 250 companies. More than two-thirds of these were introduced by the pension funds for the public employees of New York City and State.

This special report examines the shareholder-proposal activism of the New York City and State funds as well as that of comparable large public-employee pension funds in California and Florida�each of which have also been involved in shareholder-proposal activism over the aforementioned period, albeit much more modestly, and which collectively with the New York funds comprise the five largest U.S. state and municipal public pension plans by assets.

Section I examines such funds� shareholder-proposal activism, over time and by subject matter, as well as voting results. Section II looks at how their shareholder-proposal activism may have impacted subsequent share value in targeted companies. The study concludes that these publicly traded pension funds� shareholder-proposal activism did not tend to create share value; and that the New York State fund�s activism�which traces to 2010 under current comptroller Thomas DiNapoli�has been negatively associated with subsequent share-price movement relative to the broader stock market.