The refusal of Oracle Corporation to engage with shareholders is untenable, Dutch pensions manager PGGM and the UK’s Railpen have said.
In a letter to the board of the California-based technology company, the two institutions said it appeared the interests of insider shareholders was being put ahead of those on the outside – a situation they said had arisen at Oracle, as the company’s founder owns more than one-quarter of shares.
“The vote results at recent annual meetings demonstrate this misalignment of interests and call into question the board’s judgement in light of the fiduciary duty it owes to all shareholders,” the letter said.
“For three consecutive years, the advisory vote on compensation has been defeated, and certain directors, namely the members of the Compensation Committee, were only re-elected at the 2013 annual meeting because they had the voting support of the founder.”
In the letter, PGGM chief executive Else Bos and her Railpen counterpart Chris Hitchen noted that attempts in November last year for their representatives to meet with Oracle had been frustrated.
“Our request for dialogue was turned down, and it appeared our earlier letters were never received by the board,” they said.
“There is an untenable barrier in the ability of shareholders to communicate directly with the board.”
The two asset owners, with a combined value of $238bn (€212bn), said proxy access to the board should be granted, as it calculated 68% of non-insider shareholders supported such a proposal put forward last year.
The Dutch asset manager last year attempted to force through an independent board at the company, supported by Railpen, and both asset owners have long attempted to bring about change, on occasion supported by the California State Teachers’ Retirement System.