CalPERS

CalPERS stands for the California Public Employees' Retirement System. It provides pension fund and other retirement services for 1.4 million California public employees. As of October 31, 2004, it owns 171.6 billion dollars worth of stock, bonds, funds, and private equity. It is the largest pension fund in the United States.

CalPERS shareholder proposals

Being one of the largest owners in the world, CalPERS has attempted to use this power to change the way certain things are done in business. For example:

• Demanding companies disclose their Y2k readiness
• Calling on companies which operate in offshore havens to repatriate to the United States
• Calling for reform in executive compensation, especially Golden Parachutes
• Suing the NYSE over allegations that their specialists (floor workers) engage in practices which hurt investors

Criticism

CalPERS has been criticized by some for its shareholder activism. Many feel that this unduly interferes with business, is backed by a political agenda (citing the dominance of Democrats on CalPERS' board), and further encourages the belief that California is "anti-business". Others, while agreeing with CalPERS' shareholder activism in principle, criticize CalPERS for what they call its simplistic "pharisetical" thinking, such as censoring Warren Buffett because he is the Chairman as well as CEO of his company (normally this would be seen as a conflict of interest against the shareholders but Warren Buffett is the biggest shareholder). The recent director of CalPERS, Sean Harrigan, was removed from his position in December 2004. Harrigan claims he was removed for his shareholder activism.