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Treasurer Magaziner Issues Report on Actions to Strengthen Corporate Accountability

Treasurer Magaziner uses the influence of the state's $10.4 billion pension fund to compel companies to adopt more responsible corporate practices on climate change, workers' rights, corporate diversity and other key issues

Rhode Island General Treasurer Seth Magaziner today issued an overview of the actions his office has taken since 2020 to compel publicly traded companies the state's $10.4 billion pension fund to adopt more responsible and sustainable corporate practices.

Each year, publicly traded companies seek votes from shareholders on items including electing board members, executive pay packages, as well as proposals from shareholders on environmental, social and governance issues. As a multi-billion-dollar investor in the U.S. and global stock markets, Rhode Island's pension fund holds shares in thousands of companies.

"My top priority as Treasurer is to expand economic growth and protect the financial security of Rhode Islanders and future generations" said General Treasurer Seth Magaziner. "Companies that actively take leadership roles in developing more sustainable business practices are better positioned to deliver long-term value to investors, including members of the pension system as well as all Rhode Island taxpayers."

Highlights of the report include:

Climate Change: In 2021, Treasurer Magaziner submitted a first-of-its-kind shareholder proposal requesting that Walmart's board of directors publicly disclose plans to reduce the amount of the super-pollutant hydrofluorocarbon used by the company, and to layout plans to transition to cost- and energy-efficient alternatives. Hydrofluorocarbons are a significant source of greenhouse gas emissions and contributors to climate change.

Prescription Drug Costs: In December 2020, Treasurer Magaziner joined other concerned investors to press for stronger board oversight of Gilead, the maker of remdesivir the only antiviral drug approved by the U.S. FDA to treat cases of COVID-19 following the pharmaceutical giant's recent decision to unethically price remdesivir at more than 500 times its production cost.

Opioid Epidemic: Treasurer Magaziner filed a letter with the U.S. Securities and Exchange Commission (SEC) in October 2020, urging Cardinal Health shareholders to reject the board's proposed $2.5 million bonus for its CEO, following an announcement that the company had agreed to pay $5.6 billion to settle legal claims related to its role in the opioid epidemic, which includes flooding communities with highly addictive painkillers.

Hazard Pay for Essential Workers: In July 2020, Treasurer Magaziner sent a letter to the president of Stop & Shop, encouraging the company to reach an agreement for equitable compensation for front-line workers who ensured that communities have access to the food and supplies during the COVID-19 pandemic, including employees at Stop & Shop's 27 Rhode Island locations. In September 2020, United Food and Commercial Workers International Union and Stop & Shop announced they had reached an agreement on retroactive hazard pay for 56,000 associates.

Facebook: In July 2021, Treasurer Magaziner announced that Rhode Island's pension system filed a lawsuit against Facebook co-founder and CEO Mark Zuckerberg, Chief Operating Officer Sheryl Sandberg, and members of the board of directors, alleging breaches of fiduciary duties pertaining to the Facebook-Cambridge Analytica data-privacy scandal. Facebook agreed to pay a $5 billion fine to the Federal Trade Commission (FTC) for this incident which materially impacted the value of Facebook stock and harmed Facebook shareholders including members of the Rhode Island pension system.

Corporate Diversity: In December 2020, Treasurer Magaziner sent a letter to the U.S. Securities and Exchange Commission (SEC) supporting a proposed Nasdaq "Board Diversity" rule. In August 2021, the SEC approved the rule, which requires all companies listed on Nasdaq's U.S. exchanges to publicly disclose board-level diversity statistics.

Treasurer Magaziner's 2020-2021 Shareholder Engagement Overview can be found at: www.treasury.ri.gov/shareholderengagement.

Related links

  • Department or agency: Office of General Treasurer Seth Magaziner
  • Online: http://treasury.ri.gov
  • Release date: 10-14-2021

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