An overwhelming number of plan sponsors - 91.7 percent - say they either are not very active or do nothing at all to pursue shareholder rights issues, according to this month's Pensionforum survey. Despite widespread media coverage of these activities, 88.9 percent of respondents say they do not belong to any shareholder groups. Most funds, some 44.3 percent, believe it is their managers' responsibility to push companies, not theirs, and 70.6 percent say their external managers vote their proxies. An additional 34 percent say investment returns are more important than shareholder activism.
More than 94 percent of all respondents meet with U.S. corporations less than once a year. In fact, the general response to the issues that shareholder activists hold dear - executive compensation and the independence of a company's directors - appears to be a shrug. More than 95 percent of the plans do not discuss executive compensation with companies they meet. And most funds don't really seem to care about a board's makeup: 67 percent say they have no opinion as to whether a person chairing a corporate board should be an outsider. A further 61 percent have no opinion about whether there should be a limit on the number of boards a director should sit on, and 58.1 percent express no opinion about whether a director should be compensated with company stock.
Not surprisingly, shareholder activism by U.S. plan sponsors overseas inspires even less passion - 96.3 percent of respondents say they don't consider themselves to be active in shareholder issues concerning non-U.S. companies.
Those funds that do consider themselves active abroad have experience: 100 percent of this group say they've pursued these issues for more than two years.
Do you consider your fund to be active in shareholder issues concerning U.S. corporations?
Yes, very active 0.0%
Yes, somewhat active 8.3
No, not very active 43.1
No, not active at all 48.6
If so, how long have you been active?
Less than one year 9.1%
One to two years 9.1
Three to five years 9.1
Six to eight years 0.0
More than eight years 72.7
If you are not active, what is the main reason?
Investment returns are our chief priority 34.0%
It's our money managers' responsibility 44.3
We're too busy or too short-staffed 13.4
Shareholders should not interfere in corporate decisions 0.0
Other 8.2
Whether or not you consider yourself active, how often do you hold meetings with U.S. corporate managements?
Once a month or more 0.0%
Once every two to six months 3.5
Once every seven to 12 months 2.4
Less than once a year 94.1
Whether or not your fund holds such meetings, do any of your managers?
Yes, most or all of them 46.7%
Yes, some of them 43.8
No 9.5
Over the past five years, have you found U.S. managements more willing to meet with you than before?
Yes, much more willing 1.9%
Yes, somewhat more willing 7.5
No change 90.6
Do you discuss executive compensation policies with managements?
Yes 4.8%
No 95.2
Is it the opinion of your fund that the person chairing a corporate board should, in general, be an outside director?
Yes 21.7%
No 11.3
No opinion 67.0
Is it the opinion of your fund that there should be a limit to how many boards any one director may serve on?
Yes 30.5%
No 8.6
No opinion 61.0
Is it the opinion of your fund that directors should be paid at least partly in company stock?
Yes 35.2%
No 6.7
No opinion 58.1
Does your fund belong to any shareholder groups?
Yes 11.1%
No 88.9
Who votes your proxies?
The fund itself 11.9%
The fund's managers 70.6
An outside consulting firm hired by the fund 2.8
Some combination of the above 14.7
Do you consider your fund to be active in shareholder issues concerning non-U.S. corporations?
Yes, very active 0.0%
Yes, somewhat active 3.7
No 96.3
If so, how long have you been active?
Less than one year 0.0%
One to two years 0.0
More than two years 100.0
If so, which of the following do you do? (Check all that apply.)
Meet with management 12.5%
Write to management 25.0
Communicate with other shareholders 37.5
Get involved in shareholder organizations 37.5
Vote proxies 100.0
The results of Pensionforum are based on quarterly surveys of a universe of 800 corporate and 250 public pension plan sponsors. Because of rounding, responses may not total 100 percent.
