Mellon Financial Corp., OfficeMax Inc. and Clear Channel Communications Inc. are among six companies that need to improve their financial performance and corporate governance practices, the California Public Employees’ Retirement System says.
Calpers, as the biggest U.S. public pension fund is known, also targeted Brocade Communications Systems Inc., Cardinal Health Inc. and Sovereign Bancorp Inc. in its annual “Focus List” of companies. The fund wants the companies to switch to majority voting for directors and bylaw changes, remove excessive takeover defenses and account for poor financial performance, said Rob Feckner, Calpers board president.
“As a major shareholder, our overall goal is to improve corporate governance and shareholder value,” Feckner said during a call with reporters.
The pension fund, with $208 billion in assets, each year targets as many as 10 of the public companies in which it invests with the goal of forcing them to improve practices such as executive compensation, auditor independence or financial returns.
“In general, activism like this makes good sense as long as it’s focused on issues that improve shareholder value,” Brad Barber, a professor at the University of California’s Graduate School of Management at Davis, said in a telephone interview.
