December 5, 2003
Mr. Jonathan G. Katz, Secretary
Re: File No. S7-19-03
Our Fund, The Sheet Metal Workers National Pension Fund has approximately 2.5 billion dollars of participant's assets under management. As a Plan sponsor, our Plan takes seriously the duty of exercising its rights of ownership in order to promote the best economic interests of our participants and all shareholders alike.
On behalf of The Sheet Metal Workers National Pension Fund, my board and I would like to make some comments supporting the Securities and Exchange Commission proposal, S7-19-03, regarding security holder director nominations. First let me say thank you to the Commission for proposing rules that would give institutional shareholders the ability to participate meaningfully in the proxy process governing director elections. Second, our Fund would like to commend the Commission in particular for developing appropriate safeguards-including significant minimum ownership and holding period requirements for shareholders, and strict limitations on the number of shareholder nominees-that will give (us) shareholders access to the corporate proxy without opening the door to either corporate raiders or potentially frivolous nominees at numerous companies.
To permit the timely and effective use of the rules when appropriate, however, we encourage the Commission to eliminate the proposed triggering requirements, which are unwarranted given the proposed ownership threshold. We note that a five percent ownership threshold would require a $900 million investment in the average S&P 500 Company, a very substantial barrier in itself. Alternatively, we suggest that the Commission adopt requirements for submitting a triggering shareholder proposal that are identical to those under current Section 14a-8, rather than the proposed one percent ownership requirement, and also include additional triggers that do not entail a two-year delay.
We thank you for this opportunity to offer our strong support for this historic proposal, and hope that the Commission will consider our comments in formulating its final rules.