CREF Holds Annual Meeting
New York, July 21, 2010
The College Retirement Equities Fund (CREF), the companion organization to the Teachers Insurance and Annuity Association, held its annual meeting yesterday at the organization’s headquarters in New York City.
“In the midst of continued economic uncertainty, TIAA-CREF remains focused on helping our clients achieve their lifetime financial goals,” said chief executive Roger W. Ferguson, Jr. “Market volatility of the past year reinforces the importance of TIAA-CREF’s, long-term investment strategy and emphasis on providing objective advice and guidance to help clients navigate the uncertainty and stay on track.
Mr. Ferguson added: “Over the past year we continued to deliver value for clients. Thanks to disciplined cost management the expenses on CREF accounts today are about 25 percent less than they were two years ago. We also reinforced the financial strength of TIAA, the insurance company that backs TIAA Traditional and our other guaranteed products, and broadened outreach with our Spanish-language initiative and a growing presence in social media.”
In the last eight months, all four leading independent insurance company ratings agencies – S&P, Moody’s, Fitch, and AM Best – have reaffirmed their highest financial strength ratings for TIAA.1
In meeting-related actions, CREF participants:
- Elected Trustees Forrest Berkley, Nancy A. Eckl, Eugene Flood, Jr., Michael A. Forrester, Howell E. Jackson, Nancy L. Jacob, Bridget A. Macaskill, James M. Poterba, Maceo K. Sloan, and Laura T. Starks to one-year terms; and
- Ratified the Trustees' selection of PricewaterhouseCoopers LLP as CREF's independent auditors for the fiscal year ending December 31, 2010 (approximately 94 percent for, two percent against and three percent abstaining; all voting results are preliminary, but are expected to be within one percent of final tallies).
In addition, TIAA, with $204.6 billion (as of 3/31/10) in assets under management, received feedback from policyholders on its executive compensation policies and whether the company has sufficiently explained the basis for its compensation decisions through an advisory vote on executive compensation policy.
Preliminary results of the TIAA advisory vote on executive compensation show that 81 percent of TIAA policyholders who voted approved of the quality of TIAA's executive compensation plan and disclosure, including its connection to performance, achievement of TIAA's business objectives and creation of long-term value for policyholders.
In 2007, TIAA was one of the first U.S. companies to voluntarily adopt and implement an advisory vote on its compensation policies and related disclosure.
“We are proud to offer TIAA policyholders the opportunity to vote on the company’s executive compensation policies and disclosure,” said Jonathan Feigelson, general counsel and head of corporate governance at TIAA-CREF. “The shareholder vote on executive compensation is an important part of our dialogue and a governing practice that we espouse for companies in which we invest.”
Continued Action on Corporate Governance and Social Responsibility
TIAA-CREF's activities include monitoring and engaging with portfolio companies to encourage adoption of best practices in areas including executive compensation, urging companies to end ties to Sudan, reducing greenhouse gasses, social screening, and community and proactive investing. “Investing with Integrity: Aligning Values with Strategies” updates participants and the public on these activities.
“For clients interested in aligning their investments with their values we are pleased to offer access to one of the largest comprehensively screened investment vehicles and to continue our impact and community investing initiatives while seeking competitive returns,” said Scott Budde, head of social and community investments at TIAA-CREF.
Over the past year, the organization has acted on behalf of participants on issues including:
Through TIAA-CREF’s Climate Risk Initiative, launched in 2009, the organization targeted ten companies in the steel, airline, real estate and retail industries to discuss their disclosures on climate change risks. The goal of the initiative is to encourage these companies to issue a Carbon Disclosure Project (CDP) report if not already doing so, or to improve the quality of any existing disclosures.
TIAA-CREF voted in favor of 58 percent of shareholder resolutions on climate change. In 15 percent of the cases, TIAA-CREF abstained on resolutions where the organization was agreed with the proponents’ views but could not support the resolution as written. Following some of these abstentions, TIAA-CREF contacted the company involved to outline concerns. TIAA-CREF voted against resolutions considered inappropriate or unreasonable.
Encouraging Companies to End Ties to Sudan
In 2009, TIAA-CREF intensified pressure on five oil companies to sever their business ties with the Sudanese government or take meaningful steps to improve conditions in Darfur. By year-end, the organization divested holdings in four of the five targeted companies – PetroChina, CNPC Hong Kong, Oil and Natural Gas Corporation and Sinopec – because dialogue failed to produce sufficient progress. TIAA-CREF did not divest shares of PETRONAS, a Malaysian state-owned oil firm that has proved willing to engage productively with the organization on this issue.
TIAA-CREF’s engagement began in 2007, targeting twenty-two companies regarding their operations in Sudan. Ten of these companies subsequently discontinued operations in Sudan or committed to humanitarian activities. TIAA-CREF continues to collaborate with other institutional investors through the UN Principles for Responsible investment to engage with PETRONAS on its human rights policies and continues to monitor the progress of the companies from which TIAA-CREF divested as the circumstances in Sudan continue to evolve.
Executive Compensation and Corporate Accountability
The financial crises and market turmoil of the past decade have highlighted the
need for improved corporate governance and greater accountability to shareholders on the part of corporate boards and management.
In 2009, TIAA-CREF continued its multi-year effort to press for advisory votes at public companies, supporting 99 percent of shareholder-sponsored “say on pay” resolutions calling for an annual advisory vote on executive compensation. TIAA-CREF submitted advisory vote resolutions at PepsiCo and XTO Energy. At XTO Energy, TIAA-CREF’s resolution passed with 51 percent of the vote. The resolution at PepsiCo garnered 49.3 percent of the vote. PepsiCo has agreed to give shareholders this vote at the company’s 2011 annual meeting. TIAA-CREF also withheld votes from boards, board committees or individual directors at more than 300 meetings— approximately 6 percent of all meetings where directors were up for election. In these cases, TIAA-CREF concluded that the directors’ actions fell short of ethical, fiduciary or other standards.
In addition to TIAA-CREF’s direct engagement with portfolio companies, Hye-Won Choi, of TIAA-CREF’s corporate governance group, has represented the organization’s views among regulators and lawmakers. Also, reflective of our on-going commitment to corporate governance, Jonathan Feigelson, TIAA-CREF General Counsel, was appointed head of corporate governance.
TIAA-CREF is a national financial services organization with more than $426 billion in combined assets under management (3/31/10) and a leading provider of retirement services in the academic, research, medical and cultural fields.
Chad Peterson, TIAA-CREF
firstname.lastname@example.org, Cell: 917 715 9083
1TIAA has the highest rating for insurance financial strength from all four major rating agencies. Moody’s: Financial strength is Aaa with a stable outlook (as of 7/10). S&P: Financial strength is AAA with a negative outlook (as of 5/10). Fitch: Financial strength is AAA with a stable outlook (as of 4/10). A.M. Best: Financial strength is A++ with a stable outlook (as of 12/09). These ratings do not apply to variable annuities, mutual funds, or any other product or service not fully backed by TIAA’s/TIAA-CREF Life’s claims-paying ability. Ratings are subject to change. There is no guarantee that current ratings will be maintained.
You should consider the investment objectives, risks, charges and expenses carefully before investing. Please call 877 518-9161, or go to tiaa-cref.org for a current prospectus that contains this and other information. Please read the prospectus carefully before investing.
TIAA-CREF Individual & Institutional Services, LLC, and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.
Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association (TIAA) and College Retirement Equities Fund (CREF), New York, NY.