Connecticut’s $29 billion retirement trust fund has flexed its shareholder muscles and prompted one of the nation’s leading providers of general hospital healthcare services to allow long-term investors to nominate directors to its board.
State Treasurer Denise L. Nappier said Friday that a shareholder resolution earlier this week from the Connecticut Retirement Plans and Trust Funds, endorsing the right of long-term investors to nominate directors to the board of Community Health Systems, of Nashville, Tenn., won 83.15 percent of the shareholder vote – a whopping four-fifths majority.
Nappier is the retirement trust fund’s principal fiduciary. The resolution was approved at CHS’s annual meeting Tuesday in New York City.
As of Wednesday, the retirement trust fund owned 19,687 shares of CHS common stock with a market value of $247,662 and $7,271,175 in fixed income instruments.
It was Connecticut’s fund that urged the federal Securities and Exchange Commission to adopt proxy access rules more than a decade ago, Nappier said.
“Proxy access is a fundamental investor right that has been proven to increase a company’s value because directors tend to be more accountable for the creation of long-term value,” she said. “Accountability is of particular importance to shareholders at CHS, given the company’s fraud settlements in 2014 that totaled $98 million.”
Connecticut’s resolution calls on Community Health Systems to amend its bylaws to allow shareholders (owning at least 3 percent of the company’s shares for at least three years) to nominate up to 25 percent of the board on management’s proxy card.
All shareholders of the company would then have the opportunity to elect directors from a slate that includes nominees selected by the company and shareholders.
