By announcing on its Web site that it would cast its Coca-Cola shares for the company’s slate of directors including Buffett the nation’s largest public pension system is following through on plans to take a new approach to advocating auditor independence – the issue the hit the famed investor last year (See Coke Shareholders Stage Buffett Protest , Clear Conscience? ), Dow Jones reported.
Under its new policy, which CalPERS’ board approved last month (See CalPERS Ponders Outside Auditor Policy Shift ), the fund is focusing more attention on auditors that handle certain types of work for audit clients that the fund believes can potentially compromise their independence. In a sign that CalPERS’ concerns over auditor fees at Coke may also have subsided in general, the $182 billion fund voted to ratify the appointment of Ernst & Young, according to the posting.
Throughout the 2004 annual-meeting season, CalPERS withheld votes for the re-election of hundreds of audit-committee members who approved such work, including Buffett and eight other directors at Coke. Coke’s annual meeting is being held Tuesday morning.
Though CalPERS frequently voted against approval of audit firms last year, it was the blanketing of audit committees with “withhold” votes that drew criticism, even from some allies. However, CalPERS is now taking a case-by-case approach to withholding votes for the re-election of audit-committee members, according to news reports.