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Press Release


March 17, 2009


CalPERS Corporate Governance Builds on Successful 2007-08 Fiscal, Report Shows


SACRAMENTO, CA – The California Public Employees' Retirement System (CalPERS) filed 32 shareowner proposals last year, and then withdrew 25 of them after successfully engaging companies to make corporate governance changes.

Majority vote provisions, the appointment of lead independent directors, the removal of supermajority vote requirements and the adoption of clawback policies to recapture bonuses were among the concessions CalPERS received from companies that were flagged by the pension fund for poor corporate governance and performance.

"We're pleased that we didn't have to take most of these 32 shareowner resolutions to a vote, which is a last resort," said George Diehr, Chair of the CalPERS Investment Committee. "We prefer engaging corporate leaders privately to adopt good governance practices rather than taking the issue to other shareowners. The goal in either case is to attain better alignment among shareowners, management and boards and improve stock performance."

Seven CalPERS resolutions eventually went to a vote at annual corporate meetings in the fiscal year ending June 30, 2008. Shareowner support for the proposals averaged 65 percent.

Five of the seven CalPERS proposals received majority shareowner votes ranging from 61 percent to 82 percent approval. Proposals at Dollar Tree, Hilb Rogal & Hobbs and Standard Pacific asked that directors stand for annual election rather than to serve staggered board terms, which weaken accountability to shareowners. Shareowners at Tech Data and Interpublic Group voted on advisory votes for executive compensation packages. Sara Lee and Eli Lilly investors were asked to make it easier for shareowners to amend company bylaws.

In all, only proposals at Eli Lilly and Interpublic Group failed to receive majority support with 49 percent and 33 percent votes, respectively.

"We're carrying these same issues into the current proxy season," said Joseph Dear, CalPERS Chief Investment Officer. "There's never been a better time to act against executive compensation packages that reward pay for failure and to eliminate rules that insulate management and boards from being held accountable to the investors who own these companies."

CalPERS is the nation's largest public pension fund with approximately $165 billion in market assets. It provides retirement benefits to more than 1.6 million State, school, and local public employees, retirees and their families, and health benefits to nearly 1.3 million members. For more about CalPERS and its corporate governance program, visit www.calpers.ca.gov.

Contact Info:
Office of Public Affairs
(916) 795-3991
Pat Macht, Assistant Executive Officer
Contact: Clark McKinley, Information Officer
pressroom@calpers.ca.gov