CalPERS Backs Westly Reform Proposals; Executive Compensation and Emerging Markets Strategies Win Broad Support.SACRAMENTO, Calif. -- CalPERS board members today approved a new executive compensation strategy linking CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. pay to long-term company performance, a centerpiece of California State Controller The State Controller is the Chief Financial Officer of the State of California in the United States. The post has broader responsibilities and authority than the California State Treasurer. Steve Westly's reform proposals. "CalPERS has a special responsibility to look out for members and taxpayers, and our new strategy meets that test," Westly said. "We're taking a giant step towards ensuring that CEO salaries don't skyrocket while stock performance heads south." The plan adopted by CalPERS Investment Committee calls for: --Linking executive pay to long-term company performance --Prioritizing disclosure and transparency of executive compensation policies --Focusing on companies that have the worst pay-for-performance policies and recognizing those with the best. The strategy calls for CalPERS to withhold proxy votes Proxy vote Vote cast by one person or entity on behalf of another. for selected compensation committee members with the worst practices, including those who sit on multiple boards with poor pay-for-performance links or who back egregious e·gre·gious adj. Conspicuously bad or offensive. See Synonyms at flagrant. [From Latin severance packages A severance package is pay and benefits an employee receives when they leave employment at a company. In addition to the employee's remaining regular pay, it may include some of the following:
The pension fund will also engage the largest companies with abusive compensation practices within each industry. Beginning in 2005, CalPERS will coordinate institutional investor Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. support to urge use of its pay-for-performance model. CalPERS will also develop and submit to the SEC a comprehensive proposal for increased executive compensation disclosure. The strategy matches proposals Westly outlined in June. The Investment Committee also approved a formal policy for evaluating investments in emerging markets. Earlier this year, Westly called for adoption of a formal policy after CalPERS nearly removed the Republic of the Philippines from the list of emerging markets eligible for investment. "This policy sets clear guidelines for investing in some of the world's fastest growing economies," Westly said. |
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