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Focus List Program
On November 15th, 2010, CalPERS adopted a new strategy for engaging underperforming public stock companies through confidential company engagements rather than by posting a public "name-and-shame" Focus List. However, some Focus List company engagements will continue to become public information - primarily through proxy actions and shareowner solicitations.
"This approach expands our playing field with bigger companies than before," said George Diehr, Chair of the CalPERS Investment Committee. "It's consistent with our overall effort to stop the destruction of share value; to raise the bar for better environmental, social and governance practices by companies; and to comply with legislative mandates such as the federal financial market reform and Sudan and Iran divestment State laws requiring continuing engagement with some 40 portfolio companies."
Reform Focus List Companies
Find out which corporations that CalPERS is publicly engaging through the Focus List Program.
The 2012 Focus List process will include these steps:
- CalPERS will review the performance of the top 1000 U.S.-based public companies in terms of CalPERS market value ranging from $5 million to $1 billion, including stocks and corporate bonds.
- The pension fund initially will screen companies for total stock returns for one, three, and five years relative to a broad index and industry group.
- A secondary screen will be applied to evaluate: key governance factors, financial analysis and market expectations. Key governance factors include but are not limited to: board quality with an emphasis on skill-sets and diversity, board independence, board leadership, director election practices, shareowner rights, succession planning, executive compensation, risk oversight and environmental and social issues.
- CalPERS will seek to meet with each selected Focus List company to better understand their governance structure and business strategy.
- CalPERS may request specific governance reforms and sponsor or support shareowner resolutions that promote positive corporate governance change.
Wilshire Focus List Program Analysis – October 25, 2011 (PDF, 193 KB)
Read an analysis which evaluates CalPERS' corporate governance effectiveness by measuring the performance of the stocks of 169 companies targeted by CalPERS from 1999 through the fall of 2009.
The study found that over the last eleven years, privately engaged companies significantly outperformed those companies named to the public Focus List for the one, three, and five years after CalPERS made initial contact. All companies engaged through the Focus List Program produced a total cumulative excess return of 11.59% above their respective benchmark after three years, and 4.77% after five years.
November 15, 2010
CalPERS Adopts New Plan for Engaging Underperforming Portfolio Companies
March 17, 2010
Pensions & Investments: Success spurs CalPERS to Nix List for 2010