NY State, Church of England Pensions Withhold Exxon Directors Support

The $207.4 billion New York State Common Retirement Fund (NYSCRF), and The Church Commissioners for England (CCE), the Church of England’s £8.3 billion ($10.9 billion) endowment fund, are withholding their support for all ExxonMobil directors seeking re-election in protest over its “inadequate response” to climate change.

“ExxonMobil’s inadequate response to climate change constitutes a serious failure of corporate governance to which shareholders should respond firmly,” the two funds said in an SEC filing. “The fund and the Church Commissioners believe that at this time, ExxonMobil would be better able to face its challenges, including those posed by climate change, and to relate to its shareholders, with an independent chairman.”

The pension funds complained that ExxonMobil has no business-wide targets for greenhouse gas emissions reductions at its own operations; does not disclose the greenhouse gas emissions associated with the use of its products; and offers no guidance on its goal to reduce over time the greenhouse gas emissions associated with the use of its products.

In addition to withholding their support of all ExxonMobil directors, the two funds encouraged other ExxonMobil shareholders to also vote against the slate of 10 board candidates Exxon recommends its shareholders vote for in its 2019 proxy statement.

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The funds also said that “because climate change poses a threat to the long-term viability of the company,” they are voting for item 7, which proposes that the board of directors create a committee on climate change. The committee would “evaluate Exxon Mobil’s strategic vision and responses to climate change, and better inform board decision making on climate issues,” according to the proxy statement.

The NYSCRF and CCE are also voting for item 10 on the proxy card, which proposes an annual report that will disclose company policy and procedures governing lobbying. The report would also divulge payments by ExxonMobil used for direct or indirect lobbying, or grassroots lobbying communications. And it would include a description of management and the board’s decision-making process and oversight for making the payments.

“Exxon’s board’s refusal to adequately address significant shareholder concerns and properly account for climate risk in its operations, even as its competitors do so, presents a governance crisis,” New York State Comptroller Thomas DiNapoli, said in a release. “Exxon’s failure to demonstrate it is prepared to take steps toward the transition to a lower carbon future puts its business at risk. We encourage other investors to join us in voting to separate the roles of chair and CEO.”

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Tags: Church Commissioners for England, Climate Change, ExxonMobil, New York State Common Retirement Fund (NYCRF), Pension

Puerto Rico’s pension funds aren’t receiving the assistance they anticipated from a organizations for their new “PayGo” system, a plan that they adopted to maintain their payouts to beneficiaries.

The PayGo system eliminated employers’ contributions, contributions ordered by special laws, and the Additional Uniform Contribution in lieu of a system that bills public corporations, municipalities, the central government, the legislature, and the judicial branch a monthly charge to cover the benefits to pensioners.

But things aren’t really working out as intended, according to a report from the Financial Oversight and Management Board for Puerto Rico, an organization tasked with maintaining funding benefits for all retirees.

“It is very troubling that 20 municipalities and seven public corporations are also not remitting individual employee payroll withholdings for that employee’s defined contribution retirement account,” the report reads.

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These municipalities and their associated debt to the system include San Juan ($72 million), Ponce ($10 million), Carolina ($8 million), Toa Baja ($6 million), Mayaguez ($2.6 million), Caguas ($3.3 million), and others.

Public corporations who haven’t paid their fair share include the Puerto Rico Ports Authority ($31 million), Metropolitan Bus Authority ($13.6 million), PRASA ($67 million), State Insurance Fund ($24 million), and a few others.

In aggregate, these organizations owe approximately $340 million to the pensions. The oversight board said they remain committed to ensuring benefits continue to be paid out to retirees, but are exasperated at the nuances of such an unanticipated practice.

“Continued payment of retirement benefits without reimbursement from these employees is an unauthorized expenditure under the certified budget and every effort must be taken to collect these delinquent debts or offset these incremental unbudgeted expenses within other areas of the budget,” the report added.

CIO reached out to a collection of representatives from these municipalities and companies regarding the situation, none of whom responded to questions by press time.

Puerto Rico’s governor and the oversight board have held significant debates in the past regarding pension reform initiatives and work to remedy the debt-ridden commonwealth’s much-needed economic reform plans.

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Tags: PayGO, Pension, Puerto Rico