Investments

Your Guide to Proxy Season

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In the spring, a lot of people are getting ready for baseball season. At CalPERS, we’re gearing up for a different season. Proxy season.

What is proxy season?

Shareowners of public companies have an opportunity to provide input on how a company is managed by voting their proxy on specific matters. This is their right as a shareowner. This opportunity presents itself at the company’s annual general meeting, or AGM. Most companies have their AGMs between April and June, a time known as proxy season.

During proxy season, shareowners can vote on various ballot measures, also known as proposals. These proposals can be subjects like electing board members, or approving compensation packages for executives. As a shareowner of over 11,000 public companies, CalPERS has the right to cast a large number of votes.

What are our priorities during proxy season?

We view our right to vote as a responsibility—one that we do not take lightly. As a long-term investor, having the ability to provide input to a company can help ensure that the company is run with a focus toward long-term sustainable returns.

This year, CalPERS will be focusing on three priorities:

  • Executive Compensation: The salary packages designed by companies to compensate their executives. We believe that well-designed compensation packages can help align management and employees with the interests of long-term shareowners to generate sustainable investment returns.
  • Corporate Board Diversity: The amount of diversity represented on a company’s board of directors (for example, experience, skills, background, education, ethnicity, gender, etc.). Empirical evidence shows that diverse teams tend to make better decisions and have better financial outcomes than nondiverse teams.
  • Climate Change: Enhanced reporting from companies about how they plan to manage the risks and take advantage of the opportunities brought about by climate change.

Occasionally, people will hear about our efforts in working with companies and assume these efforts are taken to advance a political agenda or a social cause, and this is not the case. As outlined in our Investment Beliefs, we believe effective management of environmental factors, including those related to climate change risk, increase the likelihood that companies will perform well over the long term.

Each vote that CalPERS casts is cast to work toward the best possible investment returns that we can generate to provide the pension payments that you have earned. To see how CalPERS votes at specific companies, visit the Proxy Voting page.