The California Public Employees' Retirement System said Monday that it endorsed a proposal to require U.S. Bancorp to give shareholders a say in how the firm pays top executives.
CalPERS, the largest U.S. pension fund, with $207 billion in assets, announced its support several weeks after the Minneapolis-based bank's chief executive, Jerry Grundhofer, mailed shareholders an unusual letter urging rejection of the proposal.
U.S. Bancorp, the nation's sixth-largest banking company, plans to hold its annual meeting April 18 in San Diego.
The American Federation of State, County and Municipal Employees proposed allowing U.S. Bancorp shareholders to vote annually on the report of the bank's compensation committee. Such a vote would be advisory and would not bind the bank.
CalPERS, which owns 9.15 million U.S. Bancorp shares worth $279 million, said it "believes the proposal poses no long-term harm to the company."
Grundhofer, who was awarded $18 million in compensation last year, said in his letter to shareholders that adoption could put U.S. Bancorp at a "serious competitive disadvantage" by pressuring its compensation committee to reduce pay to uncompetitive levels.
Asked to comment on CalPERS' recommendation, U.S. Bancorp spokesman Steve Dale referred to Grundhofer's letter. CalPERS did not return a call for further comment.