Funds' Shareholder Proposal Activism Not Generating Share Value, Study Finds

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By Yin Wilczek

June 23 — Shareholder proposals filed by the top five public pension funds at the largest companies in the U.S. do not add share value, a new report suggests.

According to the study by Proxy Monitor, the funds' shareholder proposal activism may, in fact, “destroy value.”

The report also stated that “the negative overall results” for the funds' shareholder activism is driven mainly by the New York State Common Retirement Fund and, to a lesser extent, by the California Public Employees' Retirement System (CalPERS).

Tracking Resolutions, a website sponsored by the Manhattan Institute's Center for Legal Policy, tracks shareholder proposals.

Its report, “Public Pension Funds' Shareholder-Proposal Activism,” reviewed resolutions submitted at Fortune 250 companies between 2006 to 2015 by the top five public-employee pension plans in terms of total assets, excluding the Federal Retirement Thrift Savings Plan. The funds were:

• CalPERS ($297 billion in assets);

• California State Teachers' Retirement System ($187 billion);

• New York State Common Retirement Fund ($178 billion);

• New York City Retirement Systems ($159 billion); and

• Florida State Board of Administration ($155 billion).


The analysis of 2015 resolutions was based on proxy disclosures filed by Fortune 250 companies as of June 10.

Performance Sub-Par 

Among other findings, the study stated that the average stock price change of companies targeted by New York State Comptroller Thomas DiNapoli was 7.3 percent below that of the broader market one year after DiNapoli's proposals were introduced.

Companies targeted by CalPERS performed even worse, but were not given much weight by the study because the California fund filed far fewer resolutions—13—compared to the New York State Common Retirement Fund's 57 proposals.

Study author James Copland, a director and senior fellow at the Manhattan Institute who oversees, told Bloomberg BNA that the report's findings largely have been confirmed by a more rigorous study, the results of which will be released in the next few weeks.

The preliminary results “of the econometric study reinforce,” in particular, that “the New York State Common Retirement Fund’s investments in companies targeted with shareholder proposals have a strong, statistically significant, negative relationship with share value, once we control for other factors,” Copland said in an e-mail. “The shareholder-proposal activism campaign launched by New York State Comptroller Thomas DiNapoli is hurting the portfolio returns—and thus public employees and retirees, New York municipalities, and New York taxpayers.”

‘Strongly Disagree.'

However, DiNapoli spokeswoman Jennifer Freeman said her office “strongly disagrees” that its resolutions have hurt share value.

“This opinion piece misses the substance of the issue,” Freeman said in an e-mail. “We have a responsibility to our members to ensure the long term profitability of the companies we invest in.”

In one interesting finding, the report stated that the stock of Fortune 250 companies targeted by New York City Comptroller Scott Stringer through 2014 actually outperformed the broader market by 2.3 percent. However, it posited that the proposals were not responsible for the strong price gains, finding an inverse correlation between shareholder support for the resolutions and share performance.

The report also stated that it is too soon to analyze the impact of Stringer's proxy access resolutions.

In an earlier study, Proxy Monitor found that access proposals sponsored by Stringer drove up overall support for shareholder resolutions this year. 

Stringer recently released detailed voting results for his access resolutions.

To contact the reporter on this story: Yin Wilczek in Washington at

To contact the editor responsible for this story: Ryan Tuck at

The report is available at

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