Proxy voting activity

As a long-term investor, OPTrust takes the voting of proxies on behalf of our beneficiaries as an important part of our rights as shareholders. In 2010, OPTrust voted at 1,338 shareholder meetings. In total, OPTrust voted on more than 19,000 individual resolutions, supporting management 80% of the time. Cases where OPTrust voted against management included:

• equity compensation plans that contained unacceptable features, such as the ability to re-price options, excessive ownership dilution, or changes in control provisions
• compensation plans that were not sufficiently linked to performance
• the election of directors that exhibited poor attendance, sat on too many other boards, or did not meet our standards for independence
• select cases in which we voted against members of the compensation committee because of poor pay practices.

Although company management submits most of the proposals on a meeting agenda, shareholders may also submit proposals. In 2010, OPTrust voted on 319 shareholder proposals. This represents 1.6% of all the resolutions that we voted on, a significant decrease from 4% in 2009. Shareholders who engaged with companies in 2010 were quite successful in achieving positive results from their discussions, which led to the withdrawal of several shareholder proposals.

OPTrust generally supports shareholder proposals that seek positive corporate governance changes. For example, we voted in favour of proposals to: adopt a majority vote standard for director elections, separate the roles of board chair and chief executive officer, and give shareholders an annual advisory vote on the company’s executive compensation plan, also known as “say-on-pay.”

OPTrust also supports shareholder proposals that aim to improve disclosure on environmental and social issues. In 2010, we voted in favour of proposals that would require reports on sustainability and efforts to mitigate climate change risks. We also voted in support of proposals that companies comply with international human rights standards and amend their policies to prohibit discrimination based on sexuality or gender identity where comparable policies did not exist.