(Updates with Calpers' proposal for Harleysville National Corp.
board elections)
DOW JONES NEWSWIRES
The California Public Employees' Retirement System said four
proxy advisory services firms have endorsed its proposal to allow
Eli Lilly & Co. (LLY) shareholders the right to amend company
bylaws.
The endorsement from Egan-Jones Proxy Services, Glass Lewis
& Co., RiskMetrics Group and Proxy Governance Inc. comes less
than a month after Calpers called out the drug company and three
other companies for what it said was a combination of poor returns
and resistance to governance changes that could improve
performance.
According to Calpers, Eli Lilly is "one of the very few
companies in the S&P 500" that doesn't give shareholders the
power to vote to amend a company's bylaws. The group was seeking
shareholder support to turn that around during Eli Lilly's annual
meeting this month.
"We believe that granting shareholders the ability to amend
bylaws will help protect shareholder interests and improve the
board's accountability," research firm Glass Lewis said Monday.
A representative from Eli Lilly wasn't immediately available to
comment.
In conjunction with its resolution, Calpers said it will
withhold its vote from three directors, owing to Calpers including
Eli Lilly on its "focus list" in two of the past three years.
Calpers, which has been publishing the list annually since 1987, is
known for pushing for governance changes at companies where it
believes such changes could improve board accountability and
financial performance.
The pension fund has over $100 million invested in Eli
Lilly.
Meanwhile, Calpers said separately Monday it is seeking
shareholder support for a proposal to have unopposed candidates for
Harleysville National Corp.'s (HNBC) board elected by majority
vote, saying shareholders currently lack the ability to hold the
board accountable for poor performance because of the ease of
re-election under the company's current voting plan.
Currently, shareholders who oppose a candidate can withhold
votes under the bank-holding company's plurality rule, but have no
voice in the outcome because directors can be elected by just one
"for" vote, Calpers said. It seeks a change so that a majority vote
would be required in uncontested elections. The proposed change
wouldn't affect the plurality vote rule for elections with more
than one candidate vying for a seat.
Calpers, the nation's largest public pension fund, has about
$175 billion in assets and manages more than 70% of its public
stock investments internally. It provides benefits for over 1.3
million people.
-By John Kell, Dow Jones Newswires, 201-938-5285,
john.kell@dowjones.com;