SACRAMENTO — The California Public Employees' Retirement System on Thursday took its annual potshot at companies it has identified as corporate underachievers.
The $230-billion government pension fund -- the biggest and most influential in the nation -- released a so-called Focus List of 11 companies in its portfolio that staff rated as having subpar earnings and undemocratic corporate governance policies.
The companies are "the poster children for bad performance and bad corporate governance," said CalPERS President Rob Feckner in a conference call with reporters.
"Their long-term performance is at least 20% behind their peers, and they have resisted appeals to change corporate practices that make their boards unresponsive to share-owner interests."
Among the companies on the 15th annual Focus List is Tribune Co., the Chicago-based owner of the Los Angeles Times that is in the midst of making a high-profile decision to sell all or parts of the company. It also owns the Chicago Cubs baseball team, KTLA-TV Channel 5 in Los Angeles and other media properties.
Two California corporations also got the nod from CalPERS: Corinthian Colleges Inc. of Santa Ana, which offers technical and business training, and Sanmina-SCI Corp. of San Jose, an electronics components manufacturer.
Others on the list were retailer Dollar Tree Stores Inc. of Chesapeake, Va.; drug maker Eli Lilly & Co. of Indianapolis; information storage and software systems developer EMC Corp. of Hopkinton, Mass.; and International Paper Corp. of Memphis, Tenn.
Clothing maker Kellwood Corp. of St. Louis; insurance broker Marsh & McLennan Cos. of New York; food processor Sara Lee Corp. of Chicago; and hospital and medical services provider Tenet Healthcare Corp. of Dallas rounded out the eleven.
In addition to reporting poor earnings over the last five years, the companies earned CalPERS' ire by not allowing shareholders to have a greater voice in picking corporate directors and voting on proxy issues, said Senior Investment Officer Christy Wood. "We asked companies to seek reforms and gotten resistance," she said.
Many of the firms on the new list stressed that they had been talking to CalPERS about how to continue improving their corporate governance practices.
Tribune spokesman Gary Weitman said the company had been working with CalPERS on a request to stop requiring that changes in corporate bylaws be approved by more than a simple majority of shareholders.
