CalSTRS Announces Corporate Governance Work Plan Companies for the 2004-05 Proxy Season.

Business Editors/Education Writers

SACRAMENTO, Calif.--(BUSINESS WIRE)--May 5, 2004

The California State Teachers' Retirement System announced today the names of a dozen domestic companies that have been placed on the $116 billion fund's Work Plan for the 2004-05 proxy season. Over the next year, CalSTRS will work closely with these companies with the expectation of improvements in their corporate governance practices and in their financial performance.

The Work Plan companies were selected based on financial performance over one-, three- and five-year periods. Corporate governance concerns and institutional investor interest in the stocks were also considered. All the companies selected have underperformed in both the broad market index and their industry peer groups during the review periods observed.

The companies selected are:

-- Big Lots Inc.

-- Crown Holdings Inc.

-- Goodyear Tire & Rubber Co.

-- Interface Inc.

-- Libbey Inc.

-- Long's Drug Stores

-- Lucent Technologies Inc.

-- Parametric Technology Corporation 

-- Qwest Communications International Inc.

-- Sirius Satellite Radio Inc.

-- Steelcase Inc.

-- Thomas & Betts Corporation

The Work Plan companies were selected from the fund's domestic investment portfolio of more than 2,800 corporations. The fund has significant long-term investments in the selected companies, as they are primarily held in its indexed or passive accounts. Companies held in those accounts do not trade on events or market news, but follow the "buy and hold" philosophy of investing.

"At 41 percent, our domestic equity portfolio is an enormous part of the fund, the engine, if you will," said Christopher J. Ailman, Chief Investment Officer of the fund. "We cannot overlook performance outliers simply because we cannot trade away our disappointment. As long-term owners, we have to be engaged with these companies as partners in rehabilitating the health of the operating revenues, margins and capital costs. Responsible corporate governance adds value to our entire portfolio. Even five basis point improvement on our domestic equity portfolio translates into a more than $24 million value add--that's real money."

Established by law in 1913, CalSTRS is the third-largest public pension fund in the United States. It provides retirement, disability and survivor benefits to California's public school teachers from kindergarten through community college, serving more than 735,000 members and their families. CalSTRS is a defined benefit plan, with guaranteed, lifetime benefits, which are not dependent on the performance of the investment portfolio.