The city comptroller is putting pressure on some of the Fortune 500 companies that the city’s pension funds invest in.
In January, Comptroller William Thompson called on shareholders in eight of the nation’s biggest companies to vote on a resolution to create corporate policies that forbid discrimination based on sexual orientation. “This is a human rights issue,” says Thompson. “We invest our funds in these companies, but these companies should be inclusive to all people.”
Both the New York City Employees Retirement System and the Teachers Retirement System asked the comptroller to sponsor the resolution. These funds have $450.4 million and $276.4 million, respectively, invested in the eight companies Thompson is targeting.
Following Thompson’s action, each of the companies is required under the Securities and Exchange Commission Act to distribute the resolution to all their stockholders worldwide, to put the resolution on a proxy ballot for their annual meetings, and to give proponents of the resolution time at the annual meeting to submit proposals and speak on their behalf.
At least two companies have already moved in response to the comptroller’s resolution, amending their equal employment opportunity and harassment policies to explicitly prohibit discrimination based on sexual orientation.
As a result, the comptroller has agreed to withdraw the resolution from Dynegy, Inc., a power company. American Electric Power told City Limits it will follow Dynegy’s lead.
The other companies being targeted are El Paso Corporation, Reliant Energy, JCPenney Company, TXU Corporation, Georgia-Pacific and Ingram Micro.
If the companies do not alter their policies, the funds’ trustees must decide whether to continue investing in them. “Our responsibility as fiduciaries of the pension fund is first and foremost to ensure that there is a high enough return to pay the beneficiaries,” says city Finance Commissioner Martha Stark, NYCERS’ chair. “However, as stockowners in these companies, we will use all of the powers that we have to enhance these companies’ performances, and we believe that companies that don’t discriminate will earn more.”