Caterpillar Inc. (CAT) - Get Report executives this week face one of their tougher annual meetings as some investors are seeking to oust its auditing firm and place more stringent transparency policies on the company after it was charged by the U.S. government with wrongly avoiding about $2 billion in tax payments in recent years.

Change to Win, an activist group that works closely with organized labor and pension funds, launched its campaign for reform in May saying, "As Caterpillar's performance slowly improves, it is even more critical that the board take a fresh look at the company's risk mitigation practices so that the reputational costs of the tax strategy do not derail the company's recovery.

CtW Investment Group, an arm of the union coalition Change to Win, sent a letter last month Caterpillar shareholders asking them to vote against three of the firm's board members that the group claims kept inadequate watch over Caterpillar's tax strategy and outside auditor PricewaterhouseCoopers.

CtW is seeking to remove the auditor at the June 14 meeting.

The construction equipment manufacturer has faced increased scrutiny over a plan that shifted much of the profit from its lucrative replacement parts unit to a Swiss subsidiary, effectively lowering its U.S. tax bill. It's also seeking to simplify the process of clawing back money from former executive found to have been responsible for or implicated in improper behavior.

Worried about how to pay for your golden years? Ken Fisher, founder of Fisher Investments, and TheStreet's Jim Cramer will tell you what you need to know in a June 21 webinar on the market trends that are shaping retirement planning today. Register here for the event, which starts at 11 a.m. ET.

Proxy advisory firm Institutional Shareholder Services Inc. agreed with CtW and urged shareholders to support the group's clawback reform.

"The company's current policy does not include a requirement to disclose the circumstances of any recoupment in cases of misconduct by a senior executive," an ISS statement read. "While the board may be given clawback authority under the adopted clawback policy, more transparency about its use of that authority is a reasonable request."

At last year's meeting, only 65% of its shareholders approved the company's executive pay policies, and that has led the company to make some changes.

Among those changes, the company executives now qualify for performance-based equity awards for short-term performance, which some claim distanced management from shareholders' long-term interests.

Last month Goldman, Sachs & Co. analysts pointed out that while the litigation risk with the government is real Caterpillar has already lost $4 billion in market cap while the disclosed threat to the firm is just $2 billion.IRS litigation is a risk, but the market cap is down $4 billion since March 1 versus $2 bn disclosed dispute.

Federal agents raided Caterpillar's corporate headquarters on March 2. At the time the company said that the warrant was focused on collecting documents and electronic information and was most likely connected to an IRS investigation of parts transactions carried out by its Swiss affiliate.