Executive compensation practices establish a foundation for aligning management with investor interests. Given the separation of ownership and control of companies by management the design of a compensation package is critical to ensuring investors interest are aligned with management.

CalPERS is pursuing many pay-for-performance initiatives, including the following:

• Achieve executive compensation reform at companies targeted through the Focus List Program;
• Utilize the new SEC proxy disclosure to vote compensation related proposals while applying CalPERS Principles of Accountable Corporate Governance;
• Seek opportunities to engage stock exchanges, equity market regulators, governmental authorities, and institutional investors to promote reform that improves executive compensation disclosure and pay-for-performance practices; and
• Continue to expand and implement CalPERS Executive Compensation Principles of Accountable Corporate Governance market wide.