California Public Employees' Retirement System (CalPERS) and California State Teachers' Retirement System (CALSTRS), overseas institutional investors in Korea Zinc, opposed the introduction of a cumulative voting system, a key agenda item at the extraordinary shareholders' meeting scheduled for the 23rd. Among them, CalPERS is the largest public fund in the United States.
According to investment banking (IB) industry sources on the 16th, CalPERS and CALSTRS announced the voting results for the Korea Zinc extraordinary shareholders' meeting agenda on their website that day. Both entities opposed Agenda 1-1, the 'Proposal to Amend the Articles of Association for the Introduction of the Cumulative Voting System.'
The two institutions also opposed all seven candidates for outside directors recommended by Chairman Choi Yun-bum. They only supported the selection of four director candidates from the MBK Partners-Yongpoong side.
This vote aligns with the recommendations issued by Global Proxy Advisory Firm ISS on the 9th. In its analysis report on the Korea Zinc extraordinary shareholders' meeting agenda sent to institutional investors, ISS recommended opposing the introduction of the cumulative voting system, stating, 'While cumulative voting is generally regarded as benefiting minority shareholders, in this case, it could produce unintended consequences that dilute the reforms sought by the MBK and Yongpoong sides.'
ISS also opposed all seven candidates for outside directors recommended by Chairman Choi. It emphasized that additional directors from Chairman Choi's side should not be added to the board to improve Korea Zinc's governance and that MBK-Yongpoong candidates should participate in the board.
Korea ESG Standards Institute, a domestic proxy advisory firm, also recommended opposing the introduction of the cumulative voting system on the 14th. Among the board candidates, it only supported the seven candidates from the MBK-Yongpoong side.
CalPERS is an institution established to manage the pensions of California's public sector workers. As of 2022, it has managed assets of $463 billion, making it the largest public pension fund in the United States. CALSTRS is the pension fund for teachers and educators in California, managing assets of $307 billion as of 2022, making it the second-largest public pension fund in the United States.
Both institutions are collectively working to implement responsible investment principles and enhance transparency and sustainability in pension management. In particular, CALSTRS has been practicing responsible investment principles since introducing its corporate governance improvement program in 1984.