The country’s largest public pension fund, in conjunction with some of its smaller peers, took out a full page add in February 27’s Wall Street Journal against Tyco. Depicted in the advertisement was a postcard with the words “Ahhh…..Bermuda” and a businessman holding a Tyco labeled umbrella sitting on a Tyco suitcase, according to a Reuters report.
The ad copy read, “a nice place for a vacation … But should US companies take legal refuge there?” CalPERS also struck blows at some of Tyco’s offshore neighbors. The ad names as companies that have “established mailing addresses in offshore havens to avoid taxes”:
- Ingersoll-Rand Co.
- McDermott International Ltd.
- Nabors Industries Inc.
- Cooper Industries Ltd.
Fighting The Fight
CalPERS has been campaigning hard this year for large conglomerates to return to the United State to provide greater accountability. Recently the fund has put its $133 billion weight behind a shareholder resolution that urges Tyco to spurn its Bermuda address (See CalPERS Tells Tyco To Come Home to US ).
The main argument CalPERS has used is that offshore incorporations weaken shareholder protections. Tyco currently only maintains a skeleton crew in Bermuda, instead operating from executive offices in New York City.
However, some investors have shown concern that to move back to the US would raise Tyco’s taxes, hurt earnings, and undermine the health of a company burdened with a with heavy load of debt.