San Diego City Employees' Retirement System
401 B Street, Suite 400, San Diego, CA 92101-4298
Lawrence B. Grissom
June 4, 2003
Jonathan G. Katz
Securities & Exchange Commission
450 Fifth Street N.W.
Washington, DC 20549-0609
RE: File No. S7-10-03
Dear Mr. Katz:
On behalf of the over 18,000 beneficiaries of San Diego City Employees' Retirement System (SDCERS) and as a member of the Council of Institutional Investors (CII), I am writing to express agreement with the issues presented by Ms. Teslik, Executive Director of CII, in her letter to you dated May 10, 2003. I, too, would like to commend the SEC for opening discussions with respect to the issues identified in File No. S7-10-03. It is my hope that you will conduct a thorough review of the many needed reforms in corporate shareholder ownership rights.
SDCERS' Board and staff actively reviews and votes all proxies for domestic and international equity positions owned by SDCERS. Shareholder activism is an explicit right in being an owner/investor in a company; therefore, proxies are also considered assets of SDCERS.
Alignment of interests between managers of companies and the suppliers of capital can only be achieved if there is equality in the pursuit of corporate governance. SDCERS supports equal access to the proxy in providing a means for shareholders to nominate directors and make shareholder proposals. In addition, the elimination of broker votes in the case of director elections should also be considered.
Finally, SDCERS agrees that major reforms to streamline and modernize the rules in order to give investors a meaningful say in a company's governance is needed. An example of which is to improve disclosure requirements with respect to director relationships and compensation of directors and executives. Any positive changes that can be made to corporate governance practices to provide for more communication between companies and shareholders are strongly encouraged.
On behalf of SDCERS, thank you for your consideration of these requests.
Lawrence B. Grissom
cc: Fred Pierce, SDCERS' Board President
Mary Vattimo, SDCERS' Proxy Committee Chair
Doug McCalla, SDCERS' Chief Investment Officer
Ann Yerger, Council of Institutional Investors