CalPERS Wants Annual Director Elections at Sybase Inc.SACRAMENTO, Calif.--(BUSINESS WIRE)--May 13, 1998--The California Public Employees' Retirement System (CalPERS) today called on shareowners of Sybase to press the California-based software company to improve its corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. practices. In a urgent message faxed to Sybase shareowners, CalPERS called on shareowners to vote for its shareholder proposal that would end the company's staggered system of electing one-third of the board every three years and instead elect all directors annually. CalPERS has posted the letter to shareowners and its shareholder proposal on its new U.S. Shareowner Alert found on the System's Web site at http://www.calpers.ca.gov. The System owns more than 423,000 shares of Sybase stock valued at approximately $3.7 million. "A staggered board promotes insular insular /in·su·lar/ (-sdbobr-ler) pertaining to the insula or to an island, as the islands of Langerhans. in·su·lar adj. Of or being an isolated tissue or island of tissue. decision making. What Sybase needs is more accountability," said James E. Burton, Chief Executive Officer for CalPERS. "We believe accountability by the Sybase Board is of paramount importance to shareholders, and that the level of accountability is closely related to financial performance." In a letter to shareowners, CalPERS noted that Sybase's performance over the last five years was less than stellar. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the company's own proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. , $100 invested in Sybase stock on December 31, 1992 would be worth only $54 on December 31, 1997, while the same $100 invested in an index of the company's peer group would have appreciated to $307 in five years. Burton was also critical of the lack of stock ownership by Sybase's own directors. "Four of nine sitting directors have not seen fit to invest any of their own money to purchase any shares outright. This is, in our view, another indication that the directors' interests may not be aligned with the interests of shareowners," said Burton. Earlier this year, CalPERS named Sybase to its corporate governance target list of financial underperformers, noting that approximately 37 percent of shareowners capital was destroyed between 1993 and 1996. CalPERS is the nation's largest public pension fund managing assets of more than $140 billion. The System provides retirement and health benefits to more than one million state and public employees and their families. -0- Editor's note Editor's Note (foaled in 1993 in Kentucky) is an American thoroughbred Stallion racehorse. He was sired by 1992 U.S. Champion 2 YO Colt Forty Niner, who in turn was a son of Champion sire Mr. Prospector and out of the mare, Beware Of The Cat. Trained by D. : A copy of CalPERS letter to Sybase shareowners follows. Sybase Shareowner ... an Urgent Message From CalPERS! Dear Sybase Inc. Shareholder: We are writing to ask you to Vote for Item No. 5 on your proxy card A proxy card is an easily-acquired or home-made substitute for a collectible card. A proxy is used when a collectible card game player does not own a card, and it would be impractical for such purposes to acquire the card. at the upcoming May 27, 1998, annual meeting of Sybase Inc. (the Company). The California Public Employees' Retirement System (CalPERS) is the largest public pension plan nationwide, with over $140 billion assets. CalPERS is the beneficial owner Beneficial Owner A person who enjoys the benefits of ownership even though title is in another name. Notes: For example, when shares of a mutual fund are held by a custodian bank or when securities are held by a broker in street name, the true owner is the beneficial of 423,300 shares of Sybase stock. Item No. 5, which appears on page 15 of the Company's proxy statement dated April 15, 1998, is a shareholder proposal recommending the Company amend their bylaws The rules and regulations enacted by an association or a corporation to provide a framework for its operation and management. Bylaws may specify the qualifications, rights, and liabilities of membership, and the powers, duties, and grounds for the dissolution of an to declassify de·clas·si·fy tr.v. de·clas·si·fied, de·clas·si·fy·ing, de·clas·si·fies To remove official security classification from (a document). de·clas the Board of Directors and provide for the annual elections of all members of the Board. Declassification de·clas·si·fy tr.v. de·clas·si·fied, de·clas·si·fy·ing, de·clas·si·fies To remove official security classification from (a document). de·clas Promotes Accountability ... Our proposal asks the Board to reorganize itself into a single class of directors, all of whom will stand for reelection re·e·lect also re-e·lect tr.v. re·e·lect·ed, re·e·lect·ing, re·e·lects To elect again. re annually. Under the "staggered board" currently in effect, the directors are divided into three classes, each serving a three-year term. Accordingly, shareholders can only vote on one-third of the Company's directors in any given year. We believe this promotes insularity when what Sybase needs is more accountability. CalPERS Believes Accountability is Paramount ... CalPERS believes accountability by the Board is of paramount importance to shareholders, and that the level of accountability is closely related to financial performance. When the Directors are accountable for their actions, they perform better. Four Current Sybase Directors Don't Own Any Stock ... A careful reading of Sybase's April 15, 1998 proxy statement footnotes on page 9 reveals that four of nine current directors (Messrs. Alberding, Krause, Liddle, and Wayman) all of whom have served since 1995, own only options excercisable within 60 days of March 15, 1998. Four of nine sitting directors have not seen fit to invest any of their own money to purchase any shares outright. This is, in our view, another indication that the Directors' interests may not be aligned with the interests of shareowners. Burdening Investors With Poor Performance ... As a long-term shareholder, our concerns are particularly pertinent given the Company's under-performance. Information from page 23 of the Company's April 15, 1998 proxy statement dramatically illustrates Sybase's poor performance over the past 5 years. $100 invested in Sybase stock on December 31, 1992 would be worth only $54 on December 31, 1997. Meanwhile, this same $100 invested in the S&P 500 Index would have appreciated to $251; and $100 invested in the Company's selected Peer Group, the H & Q Technology Index, would have appreciated to $307! Your Vote is Important, Please Vote for Item No. 5. We hope to contact you by telephone soon, to request your support and to answer any questions you may have about CalPERS' proposal. To facilitate this telephone conversation, please transmit this letter to the appropriate person within your organization who is responsible for proxy voting Proxy voting is the delegation to another member of a voting body of that member's power to vote in his absence. It is essentially synonymous to delegated voting. Proxy voting is commonly used in corporations for voting by members or shareholders, because it allows members . Very truly yours, James E. Burton Chief Executive Officer Please Note: The cost of this solicitation is being borne entirely by CalPERS and is being done through the use of the mail and fax and telephone communication. CalPERS has retained Garland Associates, Inc. to provide proxy solicitation services for a fee of $9,000. CalPERS is not asking for your proxy card. Please do not send us your proxy card but return it to Sybase, Inc. If you have questions or need assistance in voting your shares, please contact our proxy solicitor Proxy Solicitor A specialist (firm) hired to gather proxy votes. George Garland George Garland (1753 – 1825) was an English politician and merchant involved in the Newfoundland fishery. He was born in East Lulworth, Dorset, the son of a yeoman farmer. by telephone at (212) 866-0095. CONTACT: CalPERS Office of Public Affairs Those public information, command information, and community relations activities directed toward both the external and internal publics with interest in the Department of Defense. Also called PA. See also command information; community relations; public information. Brad Pacheco/Pat Macht, 916/326-3991 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion