MODERATOR:

Frederic S. Fox
Senior Partner, Kaplan Fox

PANELISTS:

Brandon Rees
Deputy Director of the Office of Investment, ALF-CIO

Louis Malizia
Assistant Director, Capital Strategies, Teamsters

Ed Durkin
Director, Corporate Affairs, United Brotherhood of Carpenters

Scott Zdrazil
First Vice President, Director of Corporate Governance, Amalgamated Bank

Fred: Let’s discuss a look ahead to 2012, focusing on the core concerns or issues for pension fund investors in the areas of good governance, sustainability and long-term shareholder value.

Brandon: Executive compensation is going to be a continued concern for union pension fund shareholder activism in 2012. Now that we have the results from the 2011 Say-on-Pay advisory votes, we’re seeing a sorting of outlier companies with extreme levels of CEO pay or other red flags.

Specifically, a number of union pension funds have filed reform proposals at companies that received less than 70 percent on their Say-on-Pay vote. The proposals address reforms such as accelerated vesting of equity compensation which is often part of a severance package, limit tax gross ups for senior executives and golden parachutes. Also, the proposals address share retention which requires executives to hold a substantial portion of the equity compensation they receive while they remain at the company.