Seeking to woo institutional investors, H.J. Heinz Co. has embraced majority voting in board elections and other corporate governance reforms. The company unveiled these policy changes on July 20 as it sought support from state and union pension funds in a proxy contest with billionaire shareholder Nelson Peltz.

Heinz announced these commitments after CEO William Johnson met with representatives from the California Public Employees' Retirement System (CalPERS), the largest U.S. state pension fund. The Pittsburgh-based ketchup maker also detailed these steps during a presentation to the Change to Win labor federation.

Heinz officials have told ISS that the company will adopt a full majority vote standard with a director resignation policy, as Intel, Dell, and more than 30 other firms have done. In addition, Heinz said will ask shareholders to vote to change supermajority voting rules to require only 60 percent approval, rather than 80 percent, to make certain charter and bylaw changes. The company also promised to put any "poison pill" plan to a shareholder vote within a year of adoption.

"We welcome and are encouraged by the corporate governance reform commitments that the Heinz board has made to improve long-term value for shareowners," CalPERS CEO Fred Buenrostro told Bloomberg News. As of July 27, the pension fund had not announced which side it will back at Heinz's Aug. 16 annual meeting.

The meeting with CalPERS also produced a commitment from Heinz to add up to two independent directors to the company's 12-member board via current nominating processes. Director independence is a major issue in Heinz's proxy fight with Peltz, who seeks to replace five incumbent directors--that he deems "too connected" to the company--with his own nominees. In response, Heinz argues that Peltz's nominees, who include his son-in-law and a long-time business partner, would be a "self-interested voting bloc."

Peltz and his hedge fund, Trian Group, have urged the company to cut more than $500 million in costs and sell assets. Heinz has taken steps to reduce spending by $355 million, and is striving to buy back $1 billion in shares over two years, Bloomberg News reported.

ADP Proxy Services, which will mail ballots to 85 percent of Heinz shareholders, will allow retail investors to cast votes through the Internet, Heinz said. Management had accused Trian of obstructing Internet voting by these investors; Trian said that claim was "absurd" and said it welcomed such voting, according to Bloomberg News. About 22 percent of Heinz shares are held by retail shareholders through brokers and dealers, Bloomberg reported.

ISS is holding a Governance Forum on Monday, July 31, where Heinz management and the dissidents will present their arguments. The forum will start at noon Eastern (U.S.) time. To register, please click here.