PGGM prepares resolution to force through independent board at Oracle
PGGM, the €178bn Dutch asset manager, is preparing a shareholder resolution to appoint independent trustees at California-based technology firm Oracle.
In Dutch daily Het Financieele Dagblad (FD), Catherine Jackson, PGGM’s adviser, said: “The resolution is a next logical step, as shareholders lack any right at Oracle, where all board members are loyal to CEO Larry Ellison.”
PGGM has been critical Ellison’s power and Oracle’s high remuneration levels since 2010, working in tandem with UK railway scheme Railpen.
The large US teachers scheme CalSTRS, the automobile industry scheme AUW and the Nathan Cummings Foundation have now also joined PGGM in its bid to effect change at Oracle, Jackson said.
In the US, shareholders have a non-binding right to vote on remuneration.
Although Ellison has recently announced that he will step down as chief executive, he also indicated that he would become the key trustee for technical matters, as well as chairman of the board.
“This won’t improve the extremely bad corporate governance at Oracle and will confirm Ellison’s power,” Jackson said.
Oracle’s board has twice ignored a majority of shareholders rejecting its remuneration policy.
According to Jackson, Oracle also failed to reply to a previous offer to discuss the resolution.
The FD quoted Jackson as saying: “We want to increase the pressure on the company. If this is going nowhere again, we could consider disinvestment from Oracle.”
She declined, however, to provide details about PGGM’s stake in the technology firm, pointing out that the asset manager’s initiative was a “matter of principle”.
“Oracle is one of the worst performers on corporate governance,” Jackson said.
“Whereas banks and other technology companies are open to engagement, Oracle is fully keeping the boat away from the shore.”
Last year, PGGM, RPMI and CalSTRS voted against the entire Oracle board in a dispute over pay and board accountability, after the company’s compensation committee ignored their concerns.
In a letter at the time, the three players noted that their criticisms also extended to “wider issues of proper board accountability”.