David Webber on Employee-Funded Capitalism

Nell Minow
14 min readMay 16, 2018

In the subtitle of his highly recommended new book, The Rise of the Working-Class Shareholder, David Webber calls employee pension funds “Labor’s Last Best Weapon.” He says that working-class employees could be a powerful force for sustainable economic growth through their pension funds. In an interview, Webber talked about the opportunities and challenges in making the best use of that weapon.

How much money is still managed for public pension fund and labor union retirement funds?

Somewhere in the neighborhood of $3-$6 trillion is invested in U.S. public pension funds. By some measures, that’s around 10% of the market. The range is largely a question of whether one counts what they have on hand, or if you include what they are owed.

How much information do public pension funds and labor union fund participants get about the money being managed for them — about the portfolio? About how ownership rights like proxy voting and shareholder lawsuits are being managed? When they do get information, how much control do they have in providing feedback or direction?

Pension funds generate certified annual financial reports. These reports are not unlike what you might see in a 10-K. They contain certified financial information about the fund’s investment allocation and performance, descriptions of the board members, and some discussion by board members or the executive director about the fund itself. That’s also where you will find references to shareholder lawsuits. The funds tend to be pretty proud of their role in shareholder lawsuits, and often tout that role in additional materials sent to fund participants like newsletters. Some funds may disclose information more frequently. There can be variation on the public fund side because states and cities have different rules that apply to these disclosures. Some funds may also make select federal filings.

Many funds disclose both their proxy voting policies and a record of their actual proxy votes. For example, you can find both on the CalPERS website: proxy voting policy, and its global proxy voting decisions. CalPERS’s proxy voting policy spells out the fund’s highly-detailed views on investor rights, for example, and the proxy voting decisions show it voted. I don’t know how many funds offer this much…

Nell Minow

Movie critic, corporate critic and shareholder advocate, Contributing Editor at @ebertvoices plus @moviemom, and #corpgov #movies and editor at @miniverpress