Governance News from Manifest - ISSN 1745 - 1132

Shareholders in UnitedHealth have sent a powerful signal to corporate America, with 42.2% of votes cast at the company’s AGM supporting a resolution to give investors access to board election ballots.

The resolution was proposed by activist pension fund CalPERS, and would have allowed investors who have held more than 3% of the company’s stock for over two years to nominate two directors to election ballots. The resolution was opposed by management.

This vote follows a similar resolution proposed by CalSTRS at Hewlett-Packard. That proposal received 39% shareholder support.

CalPERS argues that under current rules shareholder candidates very rarely get on the ballot. The current system, the pension fund argues, helps create self-perpetuating boards where incumbent directors select nominees and decide whether to re-nominate themselves.

Russell Read, CalPERS chief investment officer, commented: “Almost half of the shareowners who voted cast a vote against management. Clearly, our message resonated, and we urge the company to adopt proxy access immediately”.

June 2007