Letter to SEC Commenting on Rule 14a-8(i)(8) - Director Nominations by Shareowners dated September 27, 2006
Mr. Christopher Cox, Chairman
Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549-1090
Re: Rule 14a-8(i)(8) – Director Nominations by Shareowners
Dear Chairman Cox:
Teamster-Affiliated Pension and Benefit funds hold roughly $100 billion in equity assets representing the retirement security of roughly 1.4 million active and 600,000 retired members of the International Brotherhood of Teamsters (IBT). On their behalf, I am pleased to comment in regard to the recent decision in American Federation of State, County & Municipal Employees v. American International Group, Inc., which held that shareholders have the right to bring proxy access bylaw proposals under Rule 14a-8(i)(8).
As investors, we expect the Securities and Exchange Commission (SEC) to uphold our rights and facilitate increased corporate accountability. In our view, any effort to weaken access to the proxy would represent a sea change by the Commission in its mission to defend investors’ rights. It could, in turn, precipitate a move by investors to shift their investments away from the stock market.
The recent AFSCME decision is a significant victory for shareholders because it provides them with essential protections that had been invalidated by the Commission staff’s most recent interpretation of Rule 14a-8(i)(8). In 2004, over a hundred trustees from 46 Teamster-Affiliated funds wrote letters encouraging the SEC to adopt a new rule under 14a-8 to permit shareholder-nominated director candidates to appear in the corporate proxy statement and proxy card.
In light of the ongoing stock option backdating scandal and serious questions regarding board oversight and accountability, shareowner access to the corporate proxy is critical for shareholders to safeguard their investments.
On September 7, 2006, the SEC announced that the Division of Corporate Finance would recommend an amendment to Rule 14a-8 and address issues raised under the Second Circuit’s decision.
We urge the Commission to preserve shareholder’s access to the proxy in this amendment in order to fulfill its mission to protect investors and the integrity of the market.
If we can be of further assistance please do not hesitate to contact Noa Oren, Project Manager, Teamsters Department of Capital Strategies, at (202) 624-8990 or noren@teamster.org.
Thank you for the opportunity to present our views on this important matter.
Sincerely,
James P. Hoffa
General President
International Brotherhood of Teamsters
cc: Commissioner Paul Atkins, Securities and Exchange Commission
Commissioner Roel Campos, Securities and Exchange Commission
Commissioner Annette Nazareth, Securities and Exchange Commission
Commissioner Kathleen Casey, Securities and Exchange Commission