The California State Teachers’ Retirement System (Calstrs) has withheld votes for eight Morgan Stanley directors, including Chairman John J. Mack, because the company has underperformed both the market and peers.
CalSTRS withheld votes from Mack, Roy J. Bostock, Erskine B. Bowles, Howard J. Davies, C. Robert Kidder, Donald T. Nicolaisen, Charles H. Noski and Charles E. Phillips Jr., according to an e-mailed statement first reported by Bloomberg News.
The California pension fund becomes the first shareholder to publicly withhold support of Mack on whose watch Morgan Stanley last year posted it’s first quarterly loss ever. The bank has urged shareholders in advance of tomorrow’s annual meeting to support Mack saying in a letter to shareholders that he “moved quickly and aggressively to address the issues” that led to the losses.
“We are concerned about the company’s compensation practices and the lack of a link for pay to performance,” the pension fund said in the statement. “Lastly, we have concerns about the strategic direction the company took leading into the subprime situation.”
The California Public Employees’ Retirement System (CalPERS) voted to withhold a vote from Bostock, who has been a director since 2005, according to the fund’s website.Both CalPERS, which holds 4.93 million Morgan Stanley shares, and CalSTRS, which holds 4.99 million shares, voted in support of a proposal to give shareholders an advisory vote on executive compensation.
Morgan Stanley has recommended that shareholders vote against the proposal.