NU Online News Service, Dec. 9, 2003, 8:33 p.m. EST – Four large public pension systems say they will seek to elect their own directors to the board of Marsh & McLennan Companies Inc., New York, as a result of revelations about trading activities at a Marsh subsidiary, Putnam Investments.[@@]
Marsh called the pension systems’ announcement, which compared the Putnam situation with another corporate scandal, “outrageous.”
The four pension systems are the pension plan at the American Federation of State, County and Municipal Employees, Washington; the California Public Employees’ Retirement System and the California State Teachers’ Retirement System, both based in Sacramento, Calif.; and the New York State Common Retirement Fund, Albany, N.Y.
The systems say they will present a shareholder proposal to allow the groups to nominate and elect directors to the Marsh board.
The systems say they hold 6.85 million shares of Marsh stock, or about 1.3%, of the company’s stock. The shares are worth $306 million.
The systems are responding to allegations that Putnam let some investors trade mutual funds after hours, giving them an advantage over most other investors. After the allegations surfaced, Marsh replaced Lawrence Lasser as Putnam’s president.
“Marsh & McLennan deserves to be the first company in U.S. history to face a binding proxy access proposal because of its gross failure to have proper controls that could have prevented the Putnam disaster,” Gerald McEntee, chairman of the AFSCME pension plan, says in a statement included in the pension systems’ announcement.