Reporting from Sacramento — The California Public Employees' Retirement System is claiming significant success with a nearly year-old initiative to pressure companies in which it invests to require a majority vote of shareholders to elect directors.
The $221-billion pension fund, the largest in the nation, now is setting its sights on Apple Inc. .
CalPERS, which has a long history of corporate-governance activism, said it plans to introduce shareholder majority-vote resolutions at Apple and three other companies next year. It also will hold talks with 34 other corporations to try to persuade them to change how they select directors.
Apple's annual shareholders meeting is scheduled for February.
Apple did not respond to a request for comment on the CalPERS initiative, which began in March.
The Cupertino, Calif., computer giant has been the target of criticism from shareholder activists partly because of its limited disclosure about the severity of Chief Executive Steve Jobs' health problems last year. Jobs' condition has been an important factor in decisions to invest in Apple, critics said.
Over the last nine months, CalPERS officials said they persuaded 20 of 58 selected companies to switch from a plurality vote to a majority-vote requirement. The plurality system theoretically could allow board members to be elected with a single "yes" vote because withheld votes by dissenters play no role in the outcome of the election.
"Too often board elections are more like a coronation than an election," said CalPERS Chief Investment Officer Joseph Dear. "The majority vote is an effective tool for holding directors accountable for creating shareowner value and encouraging better shareowner-director communication."
Some of the companies in CalPERS' portfolio that switched to a majority vote recently are Computer Sciences Corp., Corning Inc., Costco Wholesale Corp. and Edison International, the parent of Southern California Edison Co.
Those firms are among 80% of the S&P 500 and 60% of the Russell 1000 benchmark indexes that have adopted majority-vote rules for directors, CalPERS said.