The U.S.’s largest public pension funds reports further progress in its useful quest to get more publicly traded companies to adopt majority voting for directors.
Simply put, majority voting requires a director in an uncontested election to receive more “for” votes from shareholders than “withhold” votes to continue to serve on the board of directors.
The 58 companies targeted in March 2010 by The California Public Employees’ Retirement System (CalPERS) were holding onto the plurality system. Under that system, a single “for” vote could re-elect a director.
A spokesman for CalPERS said via email on Monday that 22 companies of the targeted 58 have publicly committed to adopting majority voting, which is a positive for shareholder power.
Talks with other companies, which the CalPERS spokesman would not name, are ongoing. The pension fund plans shareholder proposals about majority voting at the annual meetings of a few of the companies that won’t come around.
As noted in a separate column, moving to majority voting poses problems for California-incorporated companies because of state law provisions, though CalPERS notes some have signed on.
Apple Inc. is iincorporated in California. It recommends in its proxy that shareholders vote against the CalPERS proposal because of problems in keeping a board together that Apple perceives could result from adopting majority voting under California law.