Protect Our Assets
Increase Accountability
CalPERS has called for measures to increase the ability of shareholders to hold individual board members of corporations accountable. The same standards should apply to the CalPERS Board.
according to a report last year by paul schnitt in the sacramento beeThe CalPERS Board completed a deal where former Board member Albert Villalobos served as the placement agent. Villalobos, who has been sued 18 times in Southern California courts, has written off $350,000 in personal bankruptcy debts, and has suffered large gambling losses, was probably paid at least $1 million to broker the $100 million investment. The Board's decision was made in closed session, without a competitive bid, and against the expert advise of staff and a private consultant. McRitchie worked to obtain the staff and consultant reports, investigate possible ethical violations, and determine which Board members voted for the deal and why. McRitchie succeeded in making closed session meeting notes public, once the investments have been executed, so that we can monitor the votes of individual board members and hold them accountable.
Tighten Executive Pay Loopholes
McRitchie will work with the Council of Institutional Investors, the AFL-CIO's Executive Paywatch, and others to ensure CEOs don't dilute the value of our stock by giving themselves outrageous bonuses. Bonuses should be linked to outperforming comparable companies and shares earned should be held for several years to ensure a long term approach.
For example, former Apple Computer executive Gil Amelio received $12 million for 17 months. When he joined Apple's board he bought 350 shares. In December 1996, when he had been CEO for 10 months, he increased his shareholdings, but only to 5,000 shares. Under his reign, top Apple executives readjusted their 1 year bonus plan so they only needed to earn profits in one quarter (based on "inventory adjustments"). Apple lost $841 million last year. Amelio was so confident in his abilities that he promptly sold his bonus shares. Total return to shareholders was 53% during a time when the S&P500 was up 41%.
A study by Steve Werner and Henry Tosi (Academy of Management Journal), shows that management controlled firms, like Apple, pay their CEO's 30% more. When I was in high school, the average CEO earned 15-20 times what their average employees earned. Now it averages 212 times in the largest 30 firms. Many of these CEOs aren't worth the money and the problem of a world divided by such disparities looms large.
End Corporate Demockery
Jim McRitchie will protect our investments by working for democratic corporate governance reforms, such as confidential voting by shareholders in corporate elections, to shift the balance of power from unaccountable CEOs to boards elected by shareholders.
Under current rules, corporate CEOs can pressure shareholders to change their vote and can retaliate against those who vote against them. In addition, unvoted proxies are often counted in favor of management. A 1991 study found that over 80% of board candidates were filled by CEO recommendations. Its no wonder many boards don't adequately monitor management.
Elect Jim McRitchie to the CalPERS Board
I want to know your concerns and I value your advice. Contact: Jim McRitchie at jm@perswatch.net or telephone 916-452-5338. Visit the "McRitchie for CalPERS campaign" on the internet at http://www.perswatch.net/