CalSTRS Statement on its Proxy Vote at Occidental Petroleum
CalSTRS supports the board but calls for a vote to separate Chairman and CEO positions and opposes the company’s executive pay package.
WEST SACRAMENTO, CA – The California State Teachers’ Retirement System (CalSTRS) today issued the following statement, attributed to Director of Corporate Governance Anne Sheehan.
“CalSTRS has determined to vote in favor of the re-election of the Occidental Petroleum Board of Directors, recognizing that Dr. Irani will retire in 2014, per CalSTRS and Relational Investors’ agreement with the company.
“In accordance with Occidental’s most recent news release, we recognize and applaud the numerous changes the company is making to its governance structure and compensation programs. CalSTRS also agrees with the Occidental board’s policy to have an independent director serve as chairman.
“However, CalSTRS also believes the board should continue to honor our agreement by placing the permanent separation of the roles of CEO and chairman to a vote of the shareholders. This should be done at next year’s annual meeting. We are encouraged that the company is taking proactive steps to implement succession planning, which has been neglected in the past.
“Occidental Petroleum is an iconic California company with a long and successful track record. CalSTRS hopes that recent media attention will not detract from its focus on improving performance for the shareholders.
“In addition, CalSTRS has renewed concerns about the company’s compensation practices and therefore will be voting no on its say-on-pay proposal. While we realize a large portion of the compensation is the result of legacy plans, we believe there is continued need to improve the executive and board compensation structures to better align their interests with those of shareholders.”
The California State Teachers’ Retirement System, with a portfolio valued at $163.7 billion as of March 31, 2013, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans. CalSTRS also provides disability and survivor benefits. For 100 years, CalSTRS has served California’s public school educators and their families, who today number 862,000 from the state’s 1,600 school districts, county offices of education and community college districts.