State Pension Fund Seeks Corporate Action on Discrimination and Racial Equity
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New York State Comptroller Thomas P. DiNapoli today announced a series of shareholder proposals and other initiatives as part of the New York State Common Retirement Fund’s (Fund) ongoing efforts to increase corporate accountability for progress on diversity, equity and inclusion (DEI) issues.
“We encourage the Fund’s portfolio companies to ensure diversity, equity and inclusion throughout their businesses not just because it is the right thing to do, but because they will be better positioned to prosper in the long-term,” DiNapoli said. “As a major investor, focused on safeguarding our pension fund’s long-term value, we call on portfolio companies to adopt best practices that benefit their bottom line. More and more companies are making real progress, but more work needs to be done.”
“Harassment and discrimination, too often swept under the rug, can have a corrosive effect on work environment and threaten the reputation and success of companies,” said New York City Comptroller Brad Lander, who co-filed two of the shareholder proposals on behalf of the NYC Retirement Systems. “As shareholders, we believe that it does not serve companies or their workers to maintain a culture of secrecy about these negative experiences in the workplace. What cannot be discussed cannot be addressed. We are proud to join Comptroller DiNapoli and the New York State Common Retirement Fund to ask these companies to publicly report on the outcomes of their efforts to prevent harassment and discrimination and hold these employers accountable for their efforts.”
Companies—and their shareholders—benefit from DEI and policies that ensure hiring from the deepest pool of talent. To encourage companies to improve their practices and, by extension, their long-term value, DiNapoli and the Fund have filed a series of shareholder proposals that ask portfolio companies to increase their transparency and address the risks that come with a failure to uphold inclusivity and diversity.
Separate proposals, filed at two Fortune 500 health care companies — Centene Corporation and Molina Healthcare, Inc. — ask the companies to include reductions in maternal morbidity (death or unexpected severe outcomes after labor or delivery) as part their performance evaluations that determine senior executives’ compensation. According to the U.S. Centers for Disease Control and Prevention, Black women are three times more likely to die from a pregnancy-related cause than White women.
In addition to these shareholder proposals, DiNapoli is writing to companies in the Fund’s portfolio requesting information about board and workforce DEI policies and practices. The letter expands on his August 2020 request that companies embrace improved policies. The letters will be sent to 75 of the largest Russell 1000 index companies that lack sufficient board diversity according to the Fund’s Proxy Voting Guidelines. Companies receiving the letter include JPMorgan Chase & Co., Costco Wholesale Corporation, Netflix, Inc., Citigroup Inc., Moderna, Inc., Dell Technologies, Inc., and Caesars Entertainment, Inc.
- Against all incumbent board nominees at companies with no board directors identifying as an underrepresented minority (as defined by federal Equal Employment Opportunity Commission, which includes one or more of the following: Black or African American, Hispanic or Latino, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander);
- Against all incumbent nominating committee nominees when a board has just one director identifying as an underrepresented minority;
- Against all incumbent nominating committee nominees at companies that do not disclose the self-identified individual racial/ethnic diversity of their board directors; and
- Against all incumbent nominating committee nominees at companies that do not explicitly consider both gender and racial/ethnic diversity in their search for directors.
The Fund believes that disclosure of EEO-1 data helps investors assess their portfolio companies’ commitments to greater inclusion not just in a given year, but over time and will vote against all incumbent compensation committee members of Russell 1000 Index companies that fail to disclose EEO-1 data to investors.
Since 2018, the Fund has voted against incumbent board directors seeking re-election at companies that have no women on their boards. When a company has just one woman on its board, the Fund votes against all incumbent members of the board's nominating committee.
