The AFSCME vs. Mozilo...and 'Say on Pay' for All! (A)

Posted: 4 Jun 2009

See all articles by Fabrizio Ferri

Fabrizio Ferri

University of Miami - Miami Business School

James Weber

affiliation not provided to SSRN

Date Written: March 18, 2009


Union seeks to protect its pension funds through shareholder activism focused on corporate governance and executive compensation. The case uses Countrywide Financial as an example. Richard Ferlauto, director of pensions and benefits policy at the AFSCME, the largest public sector workers union in the U.S., was responsible for protecting the pensions of its members. Because pensions were invested for decades, Ferlauto wanted the companies in which the union invested to be managed for the long-term interests of shareholders. He believed this required good corporate governance and effective oversight by the board of directors. The case explores the history of AFSCME's shareholder activism on this front and particularly its use of shareholder proposals voted on by shareholders at annual meetings. The case then looks at the issue of executive compensation and the idea that excessive compensation is a sign of poor governance. It also discusses the union's Say on Pay proposals that sought to allow shareholders an advisory vote on executive compensation. Finally, the case provides details on the rise of Countrywide Financial, its collapse, the role it played in the mortgage financial crisis, and the excessive compensation of its CEO.

JEL Classification: G11, G34, J31, J33, J51

Suggested Citation

Ferri, Fabrizio and Weber, James, The AFSCME vs. Mozilo...and 'Say on Pay' for All! (A) (March 18, 2009). HBS Case No. 109-009. Available at SSRN:

Fabrizio Ferri (Contact Author)

University of Miami - Miami Business School ( email )

Coral Gables, FL 33146-6531
United States

James Weber

affiliation not provided to SSRN ( email )

Register to save articles to
your library


Paper statistics

Abstract Views
PlumX Metrics