The U.S. Department of Labor last week issued Interpretive Bulletin 2016-1 which reinforces the validity and importance of investors' engagement with companies in their portfolio.
"My office is actively engaging with companies in our portfolio to reign in excessive executive pay, promote transparency of political spending, strengthen diversity in the board room and push back against the student loan crisis", said Rhode Island General Treasurer Seth Magaziner. "It is gratifying to know that the Department of Labor is confirming the validity and importance of this type of shareholder action."
Shareholder engagement is necessary when corporate executives take actions that may be detrimental to shareholders such as the Rhode Island pension system. Over the past year, Treasurer Magaziner has taken a number of actions designed to protect the interests of pension system members, including voting "no" on over 70 executive compensation packages and more than 200 Board of Director candidates.
Under Treasurer Magaziner's direction, Rhode Island has also filed and co-filed shareholder proposals at large energy companies including Exxon Mobil and Chevron, pushing them to be more transparent in their political and lobbying spending. Rhode Island is the lead filer on a shareholder proposal at student loan giant Navient Corporation, requesting a comprehensive review of the company's ability to adequately serve customers in, or at risk of, default.
The Department of Labor Bulletin emphasized that "proxies should be voted" and that shareholder engagement on issues including, but not limited to, corporate governance, climate change and sustainability, and workforce practices are "increasingly being recognized as important to long-term shareholder value."
Contact: Evan England, Director of Communications - Office of the General Treasurer (401) 439-2199 (mobile) firstname.lastname@example.org