Calpers Seeks To Oust Burd From Safeway Board
PLEASANTON, Calif. - The California Public Employees Retirement System (Calpers), the largest U.S. pension fund, on Wednesday said it would withhold its vote for Safeway Inc. chairman Steven Burd and two other directors seeking reelection at the retailers annual shareholders meeting next month.
The Calpers move comes amid growing calls from other public pension funds charging Safeway's board with conflicts of interest and challenging Burd's leadership. In addition to Burd, Calpers said in a statement that it would also withhold votes for directors Robert MacDonnell and William Tauscher.
Calpers said it decided to withhold its votes against the three because Safeway's board ignored a majority shareholder vote last year to expense share options; because MacDonnell and Tauscher are members of the audit committee, which allowed the company's external auditor to perform non-audit work; and because MacDonnell has a business relationship with Safeway that Calpers says is a conflict of interest.
Calpers, which holds 2.7 million Safeway shares, also cited a $20 billion loss in shareholder value at Safeway since 2001. It said it supports efforts by other pension funds seeking reforms at the grocer, which was recently at the center of a costly five-month supermarket strike in Southern California.
Calpers and five other public funds that are seeking to oust the directors own about 8 million shares, or 2 percent, of Safeway shares.
Safeway's annual stockholders' meeting is scheduled for May 20 at corporate headquarters in Pleasanton, Calif.
Safeway issued a statement counteracting Calpers. "Safeway is in the midst of executing a well-defined strategy to differentiate itself from the competition and grow the business for shareholders, employees and customers," said Brian Dowling, Safeway v.p. "The company has acted decisively in times of challenge, aggressively reinvests in its stores, and has a sound vision for the future, which is fully supported by Safeway's Board of Directors," he said.
"Furthermore, Safeway is firmly committed to the highest standards of corporate governance, and has an ongoing process to listen to shareholders. Calpers' decision overlooks the facts about Safeway's performance. Over the last 11 years the company's share price has outperformed the entire retail sector. In fact, since 1992 investors have seen an eight-fold increase in Safeway's share price. The company's more recent stock price performance is in line with the rest of the supermarket sector, which has been under pressure from non-union discounters and a weak economy," Dowling said.
Calpers played a key role in the Disney shareholder revolt to oust chairman and c.e.o. Michael Eisner. Eisner remains Disney's chief executive.
The Calpers move comes amid growing calls from other public pension funds charging Safeway's board with conflicts of interest and challenging Burd's leadership. In addition to Burd, Calpers said in a statement that it would also withhold votes for directors Robert MacDonnell and William Tauscher.
Calpers said it decided to withhold its votes against the three because Safeway's board ignored a majority shareholder vote last year to expense share options; because MacDonnell and Tauscher are members of the audit committee, which allowed the company's external auditor to perform non-audit work; and because MacDonnell has a business relationship with Safeway that Calpers says is a conflict of interest.
Calpers, which holds 2.7 million Safeway shares, also cited a $20 billion loss in shareholder value at Safeway since 2001. It said it supports efforts by other pension funds seeking reforms at the grocer, which was recently at the center of a costly five-month supermarket strike in Southern California.
Calpers and five other public funds that are seeking to oust the directors own about 8 million shares, or 2 percent, of Safeway shares.
Safeway's annual stockholders' meeting is scheduled for May 20 at corporate headquarters in Pleasanton, Calif.
Safeway issued a statement counteracting Calpers. "Safeway is in the midst of executing a well-defined strategy to differentiate itself from the competition and grow the business for shareholders, employees and customers," said Brian Dowling, Safeway v.p. "The company has acted decisively in times of challenge, aggressively reinvests in its stores, and has a sound vision for the future, which is fully supported by Safeway's Board of Directors," he said.
"Furthermore, Safeway is firmly committed to the highest standards of corporate governance, and has an ongoing process to listen to shareholders. Calpers' decision overlooks the facts about Safeway's performance. Over the last 11 years the company's share price has outperformed the entire retail sector. In fact, since 1992 investors have seen an eight-fold increase in Safeway's share price. The company's more recent stock price performance is in line with the rest of the supermarket sector, which has been under pressure from non-union discounters and a weak economy," Dowling said.
Calpers played a key role in the Disney shareholder revolt to oust chairman and c.e.o. Michael Eisner. Eisner remains Disney's chief executive.