Oregon Treasury will join proxy vote action to demand environmental and safety changes at Massey Energy Action at upcoming annual meeting is example of state’s actions as a responsible shareholder
Oregon State Treasurer Press Release,
SALEM – Oregon will join with other shareholders of Massey Energy on May 18 and withhold votes from the company’s president and two key directors, with the goal of forcing improvements to the company’s safety and environmental practices.
Recent disclosures show that Virginia-based Massey Energy has been a bad actor with regard to its safety and environmental records in connection with its mining operations. The company owns the Upper Big Branch mine in West Virginia where 29 mine workers were killed in a collapse on April 5.
The president and targeted board members sit on the company’s safety and environmental committee. Poor oversight by that committee jeopardized people, the environment and the corporation’s bottom line. The action is the latest effort by Oregon to speak out on issues that affect corporate shareholders and, by extension, Oregon families, workers and retirees.
“We are not satisfied with the record of the management of this company and shareholders can be a powerful voice for change,” said State Treasurer Ted Wheeler. “As a responsible investor, Oregon is standing up for what is right and bringing pressure and forcing action in ways that non-shareholders cannot.”
The Oregon Public Employees Retirement Fund is part of a coalition of nine dissatisfied public institutional investors that are pressing for the ouster of the company officials. The others include public funds in California, New York, Illinois, Pennsylvania and North Carolina.
The Oregon Public Employees Retirement Fund, which had a value of $52 billion as of March 31 and is diversified and invested around the world, includes energy companies. As part of its’ indexing strategy, OPERF is invested in all public companies in the Standard & Poor’s 500 fund, which includes Massey Energy.
However, the State Treasury, which oversees the state’s portfolio, is not satisfied with the performance and safety record of this particular holding. Proxy votes can be a powerful tool to force change and make companies more accountable to shareholders. In 2009, Oregon helped force management changes at Bank of America by joining in a proxy vote.
Massey’s poor safety record has affected shareholders. Massey Energy shares have lost 30 percent in value since the start of April. The company predicts it will see second-quarter losses of between $80 million and $150 million for costs related to the explosion, including employee benefits and mine damage.
Improvements in safety, environmental efforts and better corporate responsibility will benefit employees and the ecosystem, and also could renew investor confidence and translate into better market performance.
The Oregon Investment Council oversees the asset mix and principles for Oregon’s investment portfolio, and has approved the state’s proxy voting policy. Oregon’s votes will be cast by Glass Lewis & Co., which serves as proxy agent and makes recommendations about how to cast votes.
Proxy votes are one way that Oregon is demanding more accountability from Wall Street and corporations. The Treasury also files lawsuits against companies that have failed to act in Oregon’s best financial interests, and Treasurer Wheeler is pushing for reforms in Congress.
The Oregon State Treasury protects public assets and saves Oregonians money through its investment, banking, and debt management functions. The office also promotes public outreach and education to help Oregonians learn strategies to save money, invest for college and make smart financial choices.
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