Risk & Compliance

Calpers Nixes Nominees at 11 Companies

The pension fund frowns on board audit committees that authorize auditors to do non-audit tasks.
Stephen TaubApril 27, 2004

Calpers, the nation’s biggest pension fund, announced on Monday that it will withhold proxy votes for board-of-director nominees at 11 companies, including Verizon, Merck, Adobe, and Alcoa.

In most cases, such as Adobe, Merck, and Verizon, Calpers is opposing nominees who sit on audit committees that have authorized auditors to perform non-audit services. At Alcoa, however, the fund is holding back its vote for the entire board because the directors failed to implement a shareholder-approved proposal on golden parachutes.

In its message on Alcoa, Calpers also noted that board nominee Henry Schacht chairs an audit committee that has failed to submit the auditor to shareholder ratification.

At Verizon, one of the three audit committee nominees nixed by Calpers was Sandra Moose. Until 2003, Moose was a senior vice president of The Boston Consulting Group, which received $3.5 million from Verizon in consulting fees in fiscal year 2000, the pension fund noted on its Website.

Calpers is also withholding votes from the entire board of Kimberly Clark because the directors failed to put in place shareholder-approved proposals on poison pills and options accounting.

Concerning Coca-Cola Enterprises, Calpers is withholding its vote from Philip Humann, a member of the governance and compensation committee, because he serves as the chairman, president, and chief executive officer of SunTrust Banks. The company paid SunTrust more than $1.5 million in banking and investment management fees during fiscal 2003.

Nominees at these companies were also nixed by the pension fund: Popular Inc.; Broadcom Corp.; Clear Channel Communications; Capital One Financial Corp.; and Kohl’s Corp.

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