CalPERS Shareowner Proposal Successful at Nabors Industries
June 3, 2014
External Affairs Branch
Robert Udall Glazier, Deputy Executive Officer
Brad Pacheco, Chief, Office of Public Affairs
Contact: Joe DeAnda, Information Officer
SACRAMENTO, CA - CalPERS today announced that the System's shareowner proposal at Nabors Industries (Nabors) recommending that the company change its proxy voting methodologies has passed with support from a majority of shareowners. CalPERS sought the changes to ensure equality and fairness in the manner in which Nabors counts votes cast on proxy proposals at its annual shareowner meeting.
"This is a tremendous win for CalPERS and all shareowners," said Anne Simpson, CalPERS Senior Portfolio Manager and Director of Global Governance. "This sends a clear signal to Nabors, and other companies with similar provisions, that it's time to end what some view as vote rigging."
The issue was brought to light after last year's annual meeting when a separate CalPERS shareowner proposal on compensation was not successful. Analysis of the results found that the company was using broker 'non-votes' in their counting methodologies. In contrast to 'for,' 'against,' and 'abstain' votes, which are an affirmative action by a shareowner, the act of counting non-votes allows the company to interpret those who do not respond to the proxy with an affirmative statement as being equal to an 'against' vote.
As a significant long-term shareowner, CalPERS believes that only 'for,' 'against,' and 'abstain' votes should be counted to determine the outcome of proxy proposals. CalPERS commissioned a research report on this issue which found that Nabors is one of only 36 companies in the Russell 1000 with similar voting provisions.
While the outcome indicates majority support for CalPERS, the proposal is non-binding and the practice of counting non-votes is allowed by the company by laws. CalPERS will still seek to amend the bylaws to prohibit the practice.
CalPERS is the largest public pension fund in the U.S., with more than $290 billion in assets. CalPERS administers health and retirement benefits on behalf of 3,064 public school, local agency and state employers. There are more than 1.6 million members in the CalPERS retirement system and more than 1.3 million in its health plans. For more information about CalPERS, visit www.CalPERS.ca.gov.