There was a small demonstration, with leafletting, in front of 730 Third Avenue before the meeting. Several demonstrators wore academic garb. For the first time, there was a metal detector in the lobby of the building, and shoulder bags were not permitted upstairs. (Fortunately, despite the warning that there would be no bag-check services, they did check these surprise-restricted items in the lobby.) No adhesive “Visitor" badges were issued, but you had to present your admission ticket for endorsement several times, and it could be asked-for up on the meeting floor. Elevators with attendants were set aside for us, so that we could exit only on the meeting floor.
There were several booklets available on a table in the lobby, including the corporate-style Annual Report, and copies of a letter to Neil W-----’s socially-responsible investing group. There was coffee and ice water available on a catering table. The Agenda card was handed-out by an employee. It wasn’t stacked on the table.
Wharton Auditorium was not as full as it was in 2003, perhaps 50% of the 240-person capacity. I couldn't count the employees separately. There were lots of friendly staff around, as well as security guards. Mr. Allison entered the room early (I suspect he was trailed by a bodyguard), and chatted with participants, including the "regular speakers" at meetings. The meeting was called to order at 9:05 AM. Mr. Allison introduced a number of senior employees and board members. One CREF Trustee (Bevis Longstreth) was absent, due to "a pressing business commitment". A few TIAA Trustees, and the Chairman (Mr. Ikenberry) of the Board Of Overseers attended. This is certainly a personal opinion, but the board members looked much more like corporate titans than like faculty members!
Mr. Allison’s long introductory speech did not skirt any controversial issues. He mentioned the Katzenbach Report, socially-responsible investment concerns, the “Wells Notice" received by the CFO who’s now on leave, and the Trustee resignations. But he spoke primarily about new products and developments in the businesses of the company. He specifically mentioned TIAA, despite the fact that it does not hold an annual meeting. He then introduced Scott Evans, the Chief Investment Officer, to outline the performance of the funds, and the current investment environment. It’s interesting to me that Evans only spoke about the variable annuity funds. At the 2003 and 2004 meetings, the largest list of investment options that anyone could possibly have available to them was discussed. Most of those funds are (today, anyway) operated by different subsidiaries that have separate meetings. Mr. Evans took questions for the first time. Several speakers took this opportunity to address social investing issues, although they could also have spoken later. It was appropriate for Mr. Evans to explain how the Social Choice fund works, and why he could not implement some of the divestiture requests that were made.
A new target this year was Coca-Cola, particularly on the issues of nutrition, child-targeted advertising, and third-world water supplies. It was during this section that Neil W----- spoke at length, expressing his disappointment at CREF’s disingenuous appearance of engagement with them, his group’s response of muting their actions and their subsequent dismay at the abrupt dismissal of their requests. Mr. Allison dissented. Dennis B----- made a passionate appeal against shameful corporations and the inadequacy of the “fiduciary duty" defense of institutions like CREF. In response to several people who referred to the advertising slogan “…the greater good", Mr. Allison said that while he did not mean to parse words, the slogan was in fact, “We serve those who serve the greater good." (He was mistaken. Click here to see why.) He pointed out that the meeting would not end until everyone had been heard, and he would like to move on to the elections.
All eight CREF Trustees were elected with approximately 96% of the votes "For". This is comparable to 2004, so there was no "scandal effect" on the size of this vote. Needless to say, there are no opposing candidates available to vote for. At the start of the meeting, there had been only six trustees, due to controversial resignations.
The new auditors were approved with 95.98% of the votes "For". We haven't voted for auditors since 2000, so there's no comparison to be made. Will we get to vote again next year? I think not.
My proposal was rejected, with 22% of the votes "For", 70.6% "Against", and 7.4% "Abstaining". This is a very respectable result for a first proposal by an "unknown" proponent, and I thank you sincerely for your support. It's a slightly higher percentage than any of last year's proposals, but not high enough to worry CREF!
Mr. Allison then opened the floor for general comments. There was no demonstration in the back of the auditorium, as there was in 2003. But a number of passionate statements were made, beginning with Fern G-----, a registered dietician, who spoke against Coca-Cola. Regina di---- spoke for “SprawlBusters" of New Jersey. Mark F-----, a lawyer and past employee of TIAA-CREF (not during Mr. Allison’s tenure) spoke about his disappointments with the culture there during his time. He asked a number of questions about CREF’s voluntary compliance with Sarbanes-Oxley, most of which were answered by the representative of the accounting firm, a rare class of speaker in my annual meeting experience. Curt V-----, a previous proxy proposal proponent lamented the little attention to governance issues at the meeting. He asked for CREF to report the “corporate citizenship" evaluations they had pledged to collect.
I spoke on how the "Open Plan Solution" can be expected to harm the massive base of variable annuity customers. My brother asked about IRS repeal of transferability regulations. Mr. Allison's response did not address what happens to former employees with 403(b) plans.
Mr. Allison adjourned the meeting at 11:50 AM. The principal officers did not rush out of the room, but generally spoke to people who approached them at the dais, or where the boards and officers were seated in the audience.
This was characteristic of the meeting’s general tone, which was clearly intended to demonstrate accessibility and tolerance for various points of view. I don’t mean to say that those points of view will be implemented as requested, only that it is impossible for anyone to say that they were not given a courteous hearing! Even though several speakers rambled, and went far over the stated time limits, no one was actually cut off. In the two cases where Mr. Allison suggested that someone “sum up", the request was entirely appropriate.
Only because it's part of my professional experience, I was surprised at how many sound and slide projection glitches there were. The companies I worked for would never get rehired for another annual meeting with that level of performance.
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