Risk & Compliance

Off with CalPERS’ Head?

The president of the nation’s largest pension fund said he was told that a majority of the pension fund's board will vote to replace him early next...
Stephen TaubDecember 1, 2004

Sean Harrigan, president of the California Public Employees’ Retirement System (CalPERS), the nation’s largest pension fund, thinks he will be fired today as a result of his strong activist agenda, according to the Los Angeles Times.

Harrigan, a regional executive for the United Food and Commercial Workers Union, and president of CalPERS since early 2003, serves on the pension fund’s panel as the representative of the state’s Personnel Board. He asserted that he was told that a majority of his fellow board members would vote Wednesday to replace him when his CalPERS term expires early next year, according to the report.

Harrigan insists that members of Gov. Arnold Schwarzenegger’s administration are trying to get rid of him, but he was unable to provide solid evidence, the Times said.

He reportedly singled out Walt Disney Co. and Safeway Inc. — two popular targets this year among corporate activists — saying they are “trying to take out one of the most outspoken advocates on behalf of corporate governance in the country.”

The paper said a spokesman for Schwarzenegger dismissed Harrigan’s allegations as a “conspiracy theory.” Disney vice president John Spelich called Harrigan’s charges “utterly ridiculous,” while Safeway did not return calls seeking comment, according to the report.

The paper explained that Harrigan’s tenure became a political issue on Monday when the presidents of several unions and the heads of consumer and retiree groups sent a letter to Personnel Board members, urging that Harrigan be retained.

“It would be unconscionable if the Schwarzenegger administration and a few narrow corporate interests — such as the Chamber of Commerce, who have opposed corporate reform efforts — were to use the [Personnel Board] as a pawn in their fight against shareholders and fundamental fairness in our national’s financial markets,” the letter reportedly said.

The paper said CalPERS investment committee chairman and long-time Harrigan ally Rob Feckner confirmed that Harrigan was expected to be replaced. He insisted, however, that Harrigan’s departure would not result in CalPERS backing off with its shareholder activism.

Earlier this year, Harrigan and CalPERS led a shareholder effort to remove Disney chief executive Michael Eisner.

In recent months, CalPERS has signaled its intent to fight what it deems to be excessive executive compensation, as well as auto pollution and conflicts of interests among board members.