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Treasurer Magaziner Votes Against Excessive Pay for Corporate Executives

During the ongoing 2017 shareholder season the Rhode Island pension fund will vote "no" on management-backed compensation plans for executives at publicly traded companies including Wal-Mart, American Express, Charter Communications, and pipeline builder NuStar Energy.

"My job as Treasurer is to deliver strong financial performance for of our state's $8 billion pension fund. Rewarding executives with excessive salaries and bonuses goes against the interest of the fund and the public whom we serve," said Treasurer Magaziner. "Executive compensation should be transparent and based on performance."

The "no" votes are in response to a fundamental misalignment between executive pay and company performance or because the pay packages are excessive or otherwise inappropriate. Recent studies suggest CEOs at large, publicly traded companies in the US are paid more than 300 times more than their average employee.

In the case of insurance provider Aflac, the State voted against a proposal to raise the CEO's compensation more than $20 million, a 70% increase from the previous year. The State also voted against a proposed $850,000 retirement bonus for the CEO of railway company Kansas City Southern, as well as a proposal to give $20 million in company stock to Johnson Controls' CEO for "severance" as he leaves the CEO position to become the company's board chairman.

Each year, shareholders of publicly-traded companies can vote on a range of issues, including approval of boards of directors and executive compensation, as well as shareholder proposals concerning social and environmental issues.

In 2016, Treasurer Magaziner strengthened the state's shareholder voting policy to better advocate for the pension fund and its members. Voting on proxy issues provides an opportunity for shareholders to communicate directly with the board. Rhode Island Treasury's proxy voting guidelines reflect the fiduciary duty of the Rhode Island Treasurer's Office to vote proxies in the best interest of our members and constituents.

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  • Department or agency: Office of General Treasurer Seth Magaziner
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  • Release date: 05-25-2017

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