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February 20, 2007
Effort to Ensure Accountability, Growth, Greater Shareowner Value
SACRAMENTO, CA – The nation’s two largest public pension funds – owners
of more than $1.2 billion in stock at Hewlett-Packard Company – today asked HP shareowners to pass
Proposal 3 on the company’s March 14 ballot that would give shareowners a voice in nominating
independent directors.
Separate letters to as many as 7,500 shareowners from the California State Teachers’ Retirement
System and the California Public Employees’ Retirement System follow a spate of HP director scandals
-- from spying on one another and on journalists, to stock option investigations.
CalSTRS Executive Director Jack Ehnes said CalSTRS believes it is important to speak out on the
need for Proposal 3.
"This is really an issue of shareowner rights," he said. "Without access, it’s a one-sided nomination
process which leads to a disconnect between what shareowners expect and want and what corporate boards
deliver."
CalSTRS owns $533 million in HP stock.
"Sadly, today shareowners have no way to hold accountable dysfunctional, entrenched boards that harm a
company’s ability to grow, create jobs, and generate shareowner value," said Rob Feckner, President of
the Board of Administration for CalPERS, which owns $695 million in HP stock.
"But this amendment to the bylaws will change that. It will give all shareowners access to HP’s proxy
materials, critical to cost effectively communicating the quality of director candidates shareowners
recommend. By passing Proposal 3 on the ballot, owners of the company can meaningfully exercise their
right to achieve strong corporate governance that fosters democracy, director accountability and long
term value creation."
Shareowners will vote on the resolution at the company’s annual meeting on March 14, 2007, in Santa
Clara, California. As a change in bylaws, the proposal will require two-thirds of the outstanding shares
entitled to vote.
Proposal 3 on HP’s proxy card was submitted by the AFSCME Employee Pension Plan, the New York State
Common Retirement Fund, the Connecticut Retirement Plans and Trust Funds, and the North Carolina Equity
Investment Fund Pooled Trust.
Today, CalPERS Senior Investment Officer of Global Equity Christianna Wood began a campaign to
communicate with the top investors of HP.
"The fundamental right of shareowners is to have access to the proxy to ensure that good governance of
a company exists, so it can grow and sustain long term value."
CalSTRS has 12.6 million HP shares. With a $157.9 billion investment portfolio, CalSTRS is the
second-largest public pension fund in the United States. It provides retirement, disability and survivor
benefits to California's 800,000 public school educators and their families.
CalPERS has 16.5 million HP shares. The System is the nation’s largest public pension fund with assets
totaling more than $230 billion, providing retirement and health benefits to approximately 1.5 million
State and local public employees and their families.
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