The California Public Employees’ Retirement System (CalPERS), the biggest public sector pension fund in the U.S., is pushing for a board overhaul at Ebix, saying the six long-tenured directors serving on the company’s seven-person board should be held accountable for “repeatedly ignoring” appeals for a more diverse board.
CalPERS said in a Tuesday letter to fellow Ebix shareholders that it would vote against Chairman Robin Raina and directors Neil Eckert, Rolf Herter, Hans Benz, Pavan Bhalla, and Hans Keller at the upcoming September 14 annual meeting. The targeted directors have all been members of the board for at least 12 years.
The pension fund, owner of a 0.2% of the stock, said the incumbents have demonstrated a “lack of responsiveness to multiple CalPERS shareowner engagement requests to address board composition related to diversity.” The investor cited a third-party study on board diversity and its benefits for companies.
The only director left out by CalPERS’ letter is George Hebard, the representative of Barington Capital. Hebard, a managing director at Barington, joined Ebix’s board in 2015 according to an agreement between the company and the activist, inked a year before.
CalPERS’ appeal comes amid growing concerns among institutional investors regarding board and management diversity. In an open letter published last week, $3 trillion fund State Street Global Advisors said it plans to ask companies in its portfolio to increase transparency on issues such as ethnicity and race and threatened to vote against those who do not heed its advice. Rival asset managers BlackRock and Vanguard also voiced support for greater board diversity in gender and ethnicity in recent years.
CalPERS also flagged other corporate governance practices at Ebix that it sees as problematic. Among these, the pension fund noted that the software and e-commerce solutions company combines its chair and CEO roles, has a plurality vote standard for uncontested director elections, and does not allow proxy access.
Shares in Ebix traded down 5.8% at 11:10 a.m. EDT on Thursday.