With more than six and a half billion dollars in commitments, the AFL-CIO Equity Index Fund is the fastest growing AFL-CIO investment fund in history.
The success of the AFL-CIO Equity Index Fund is proof that union pension plans have a strong interest in pooling their investment dollars, and demonstrates their belief in low investment management fees and investments that promote good corporate governance.
The AFL-CIO Equity Index Fund is helping to reform CEO pay with its shareholder activism. This year the Fund is going after companies that reimburse their executives for taxes owed on their golden parachutes. Already, half a dozen companies have agreed to end these tax gross-ups for executives.
Let’s keep these programs growing and continue to build on their record success.
AFL-CIO Investment Trust Corporation
AFL-CIO Equity Index Fund’s Activism Pays Off .Companies Adopt Policies to Eliminate Fringe Benefit for Executives
Death and taxes are certain for most Americans. But top executives of some of the nation’s largest companies have been able to avoid paying taxes on multimillion dollar severance packages they collect if they lose their jobs. Now, thanks to the efforts of the AFL-CIO Equity Index Fund, the CEOs of more than 20 companies will have to pay their own taxes on “golden parachutes.”
Most companies in the S&P 500 index have already eliminated the practice of paying the federal taxes their executives owe on severance packages. The fund, however, identified 33 companies that continued to make such payments and had not formally agreed to end the practice, or had not adequately disclosed that the practice was no longer in place.
The Equity Index Fund wrote to the companies last fall. According to the letter, these tax payments “may lead to substantial increases in potential termination payments and may encourage executives to negotiate transactions that may not be in the best interests of shareholders.”
For example, at Parker-Hannafin Corp., the company would pony up more than $47 million in taxes on the severance packages of its top five executives if the company was acquired and they lost their jobs.
Due to pressure from the Equity Index Fund, companies including McDonald’s and Dr. Pepper Snapple Group dropped the practice.
At the five remaining companies that refused to drop the practice, such as Peabody Energy, the fund filed a shareholder proposal which will be voted on at the annual shareholder meetings this year.
WATCH IAM International President Tom Buffenbarger: AFL-CIO Equity Index Fund and the Importance of Shareholder Activism
Plasterers and Cement Masons Local #567
Plasterers and Cement Masons Local #567 was chartered in 1921. The local represents 135 cement finishers and plasterers throughout the Greater New Orleans area and parishes across southeast Louisiana.
Local 567’s Business Manager and Financial Secretary Kirk Lee is proud of the opportunities he is able to offer to his members. “This is a position where you get to help others. You can help them find good work and good paying jobs. With the right certifications, construction jobs can lead to long careers in the field.”
Mr. Lee became the Business Manager in 2003. He has been involved in the labor movement for almost 42 years.
“The AFL-CIO Equity Index Fund is one of the most vital strategic initiatives we have for increasing worker influence on corporate governance in America.”* – Kirk Lee, Business Manager & Financial Secretary, Plasterers and Cement Masons Local #567
What the New York Labor Movement is Saying About the AFL-CIO Equity Index Fund*:
“Our pension assets are a powerful, but too infrequently used tool to create positive change. That’s why it is so important that the AFL-CIO Equity Index Fund makes corporate America more responsive to the pension plan assets of our members and all hardworking men and women.”
- Mario Cilento, President
New York State AFL-CIO
- Vincent Alvarez, President
New York City Central Labor Council
- James W. Cahill, President
New York State Building & Construction Trades Council
- Gary LaBarbera, President
Building and Construction Trades Council of Greater New York
*Testimonials may not be representative of the experience of other customers. Testimonials are no guarantee of future performance or success.