Hailing from New York, I’ve always had this provincial suspicion about the mettle of California, and, by default, Californians.
I mean, at least half of their streets and begin with the prefixes “La” or “Buena,” and many of their major roadways are almost never referred to by name, but rather, by number.
For example, “Take the 101 to the 405 to the 5.”
“For sure, for sure.”
What do they know about navigating below-zero wind chills, or being one among hundreds of commuters sardined into stifling subway cars?
When I once attempted to jaywalk on Madison Avenue, a dour-looking constable growled at me from a dented squad car and prefaced a “don’t …….ing do this again” warning with at least a half-dozen expletives that centered on my relationship with my mother.
Three years later, when I curiously attempted the same feat on Sunset Boulevard, a traffic cop tried to get my attention by placidly waving, “Hey guy.”
See? It’s just not the same.
But admittedly, one group from the Golden State that has proven that it’s not to be taken lightly is pension fund giant the California Public Employees' Retirement System, or CalPERS.
For those on another planet, CalPERS, the nation’s largest pension fund with assets of $167 billion, provides retirement and health benefits to 1.4 million public employees and their families in California. It also has roughly 3,000 companies in its U.S. investment portfolio.
And lately it’s been making a lot of noise in the corporate governance arena, especially pertaining to proxy votes and re-election of companies’ boards of directors.
Since CalPERS holds varying shares in a vast number of companies, it can certainly gum up what, for the most part, is a traditionally uneventful election process should it decide that a company’s corporate governance is not up to snuff.
Lately, the “vote no” targets of its governance wrath include Coca-Cola, grocery giant Safeway, Citigroup and American Express, among others.
At Coca-Cola, CalPERS withheld support from all six members of the company’s audit committee, claiming it sanctioned its auditor, Big Four firm Ernst & Young, to perform “non-audit” services. It should be noted that one of the audit committee members is a gentleman by the name of Warren Buffet.
CalPERS then zeroed in on five directors of Citigroup's audit committee because outside auditor KPMG had performed non-audit work. It also withheld support for three board members, including company überchief Sanford Weill.
After threatening to withdraw support for several audit committee members at American Express — where it holds 5.5 million shares — because the financial services concern allowed its outside auditor to perform non-audit services, it reversed its position when AmEx pledged to reduce non-audit work and subsequently revealed the amount of non-audit fees it paid over several years.
Its recent skirmishes with the Fortune 500 elite have been met with mixed reactions.
Reformers obviously laud the pension concern’s actions, while others have accused it of playing the schoolyard bully.
But my lone school of thought is that if their actions help keep the big kids on the straight and narrow in terms of governance and audit independence, then maybe that’s not such a bad thing.
I’m not going soft on California, but give them their due.
Although I still have my doubts about their survival rate on the A train.
