The California Public Employees’ Retirement System has singled out directors at another 13 companies from whom it will withhold votes. They include nominees at Gannett, Echostar, 3M, Colgate-Palmolive, and United Parcel Service.
As in most previous cases, the nation’s largest pension fund especially frowns on audit-committee members who authorized their company’s auditor to perform non-audit services, but this is not the only reason.
At Zimmer Holdings, which makes orthopedic surgical products, Calpers says it is opposed to John McGoldrick, the chairman of the compensation committee, because he also serves as executive vice president and general counsel of Bristol-Myers Squibb, which owned Zimmer Holdings until August, 2001. “We believe this business relationship could impair the nominee’s objectivity,” it adds on its Website.
Calpers also plans to withhold its vote for Apache Corp. nominee F.H. Merelli, a member of the audit committee. It frowns on the fact that he is chairman, president, and chief executive officer of Cimarex Energy, Co. which in fiscal 2003 received $7 million from Apache and paid $5.7 million to the company for various business transactions.
At Avon Products, Calpers is opposed to three nominees — Edward Fogarty, Susan Kropf, and Maria Lagomasino — because they failed to implement shareholder-approved proposals on classified boards and expensing of options. Calpers also asserts that Lagomasino, a member of the compensation and nominating/corporate governance committees, is chairman and chief executive officer of J.P. Morgan Private Bank, a division of J.P. Morgan Chase & Co., which provided services to the company during fiscal 2003.
And at United Parcel, Calpers said it will withhold its vote for nominee Gary MacDougal, a member of the compensation, nominating, and corporate governance committees, because he is a trustee of the Annie E. Casey Foundation, a charity to which UPS donated about $5 million in shares in 2001.