Steve Tamari Shareholder Proposal (College Retirement Equities Fund)
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 DIVISION OF May 10,2013 INVESTMENT MANAGEMENT Phillip T. Rollock Senior Managing Director and Corporate Secretary College Retirement Equities Fund 730 Third Avenue New York, NY 10017-3206 Re: College Retirement Equities Fund ("Fund") Shareholder Proposal of Steve Tamari Dear Mr. Rollock: In a letter dated March 22, 2013, you notified the staff of the Securities and Exchange Commission ("Commission") that the Fund intends to omit from its proxy materials for its 2013 annual meeting a shareholder proposal submitted by Steve Tamari in a letter dated January 14, 2013. 1 The proposal provides : THEREFORE, shareholders request that the Board end investments in companies that, in the trustees' judgment, substantially contribute to or enable egregious violations ofhuman rights, including companies whose business supports Israel 's occupation. There appears to be some basis for your view that the Fund may omit the proposal from the Fund's proxy materials pursuant to Rule 14a-8(i)(10) under the Securities Exchange Act of 1934, which permits omission of a proposal that has been substantially implemented. Accordingly, the Division of Investment Management ("Division") will not recommend enforcement action to the Commission if the Fund omits the proposal from its proxy materials in reliance on Rule 14a-8(i)(1 0). In reaching this position, we have not found it necessary to address the alternative bases for omission set forth in your letter. Because our position is based upon the facts recited in your letter, different facts or conditions or additional facts or conditions may require a different conclusion. Further, this response only expresses our position on enforcement action under Rule 14a-8 and does not express any legal conclusion on the issues presented. We also received four letters from the proponent dated April15, 2013 and April29, 2013 (two letters) and May 2, 2013, and three response letters from the Fund dated April22, 2013 (two letters) and May 1, 2013. Phillip T. Rollock May 10,2013 Page 2 of2 Attached is a description of the informal procedures the Division follows in responding to shareholder proposals. If you have any questions or comments concerning this matter, please call me at (202) 551-6795. Sincerely, Senior Counsel Insured Investments Office Attachment cc: Steve Tamari DIVISION OF INVESTMENT MANAGEMENT INFORMAL PROCEDURES REGARDING SHAREHOLDER PROPOSALS The Division ofInvestment Management believes that its responsibility with respect to matters arising under Rule 14a-8 [17 CFR 240.14a-8], as with other matters under the proxy rules, is to aid those who must comply with the rule by offering informal advice and suggestions and to determine, initially, whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission. In connection with a shareholder proposal under Rule 14a-8, the Division's staff considers the information furnished to it by an investment company in support ofits intention to exclude the proposals from the investment company's proxy material, as well as any information furnished by the proponent's representative. The staff will always consider information concerning alleged violations ofthe statutes administered by the Commission, including argument as to whether or not activities proposed to be taken would be violative ofthe statute or rule involved. The receipt by the staff ofsuch information, however, should not be construed as changing the staffs informal procedures and proxy review into a formal or adversary procedure. The determination reached by the staff in connection with a shareholder proposal submitted to the Division under Rule 14a-8 does not and cannot purport to "adjudicate" the merits of an investment company's position with respect to the proposal. Only a court, such as a U.S. District Court, can decide whether an investment company is obligated to include shareholder proposals in its proxy material. Accordingly, a discretionary determination not to recommend or take Commission enforcement actions, does not preclude a proponent, or any shareholder of an investment company, from pursuing any rights he or she may have against the investment company in court, should the management omit the proposal from the investment company's proxy material. ~~ Phillip T. Rollock Senior Managing Director and 1:.'FINANCIAL SERVICES Corporate Secretary FOR THE GREATER GOOD• Tel: (212)916-4218 Fax: (212) 916-6524 [email protected] March 22, 2013 VIA HAND DELIVERY William J. Kotapish, Esq. Assistant Director Division of Investment Management U.S. Securities and Exchange Commission 100 F Street, N .E. Washington, DC 20549 Re: College Retirement Equities Fund- 2013 Annual Meeting Omission of Shareholder Proposal of Steve Tamari et al. Dear Mr. Kotapish: College Retirement Equities Fund ("CREF") intends to omit from its proxy statement and form of proxy ("2013 Proxy Materials") a shareholder proposal and supporting statement that were submitted to CREF by Steve Tamari ("Proponent"), dated January 14, 2013 ("Proposal"),1 for CREF's 2013 annual meeting.2 This letter provides notice to the staff ("Staff') of the Securities and Exchange Commission ("Commission") of CREF' s intent to omit the Proposal. CREF is subject to the non-profit corporation law of New York, regulation by various state insurance departments and is registered with the Commission as a diversified, open-end management investment company under the Investment Company Act of 1940, as amended.3 CREF and Teachers Insurance and Annuity Association of America A copy of the Proposal is attached as Exhibit A Several CREF participants submitted nearly identical proposals for inclusion in the 2013 Proxy Materials. In the correspondence, most participants indicate that Steve Tamari will act as the lead filer. CREF intends to omit all of these proposals, and the term "Proposal," as used herein, refers to these other proposals as well. If CREF were to include Mr. Tamari's proposal in the 2013 Proxy Materials, CREF would exclude the other proposals as duplicative. See 17 C.F.R. § 240.14a-8(i)(ll). 2 CREF expectsto file defmitive Proxy Materials on or about June 10, 2013. CREF has eight different investment accounts: the Stock Account, Social Choice Account, Growth Account, Global Equities Account, Equity Index Account, Money Market Account, Bond Market Account, and Inflation-Linked Bond Account. www.tiaa-cref.org ("TIAA") form the principal retirement system for the nation's education and research communities. The financial services organization of which both companies are a part is sometimes referred to as "TIAA-CREF."4 The Proposal requests that CREF cease investing in companies that allegedly provide "support for the Israeli occupation and segregated settlements in the West Bank, including East Jerusalem." Specifically, the Proposal requests shareholder action on the following resolution: THEREFORE, shareholders request that the Board end investments in companies that, in the trustees' judgment, substantially contribute to or enable egregious violations of human rights, including companies whose business supports Israel's occupation. The Proposal is nearly identical to a shareholder proposal submitted to CREF in 2011 ("20 11 Proposal"), where the Staff concurred with our conclusion that the proposal could be omitted from CREF's proxy materials because it dealt with a matter related to CREF's ordinary business operations.5 For the same reason, we believe that the Proposal here is properly excludable from the 2013 Proxy Materials. We also believe that the Proposal is properly excludable because the essential objective of the Proposal already has been substantially implemented, and thus the Proposal is excludable pursuant to subparagraph (i)(10) of Rule 14a-8 under the Securities Exchange Act of 1934, as amended ("Exchange Act").6 For these reasons, we request that the Staff confirm that it will not recommend that enforcement action be taken if CREF omits the Proposal from its 2013 Proxy Materials. Please be advised that, pursuant to paragraph G) of Rule 14a-8, CREF simultaneously has notified the Proponent of its intent to omit the Proposal from its 2013 Proxy Materials by a copy of this letter. 4 TIAA-CREF Investment Management, LLC, an indirect subsidiary ofTIAA, serves as CREF's investment manager. 17 C.F.R. § 240.14a-8(i)(7); see College Retirement Equities Fund, SEC No-Action Letter (pub. avail. May 26, 2011) ("2011 No-Action Letter"). A copy of the 2011 No-Action Letter and related correspondence with the SEC staff is attached as Exhibit B. 6 We argued that this exclusion also applied to the 2011 Proposal, but the Staff did not need to address the argument because the Staff agreed that the 2011 Proposal was excludable pursuant to subparagraph (i)(7) of Rule 14a-8. Page 2 of 8 I. ANALYSIS A. The Proposal may be excluded under Rule 14a-8(i)(7) because it deals with matters relating to CREF's ordinary business operations. A proposal may be omitted under Rule 14a-8(i)(7) if it "deals with a matter relating to the company's ordinary business operations." This paragraph of the rule is captioned "management functions." The Commission has explained that the policy underlying the ordinary business exclusion under Rule 14a-8(i)(7) rests on two central considerations. The first consideration is that "certain tasks are so fundamental to management's ability to run a company on a day-to-day basis that they could not, as a practical matter,