The call came via a Shareowner Alert sent to the top 100 holders of Tyco stock. The nation’s largest public pension fund is asking fellow shareowners to join in voting yes on a proposal sponsored by the American Federation of State County & Municipal Employees (AFSCME) pension plan. Proposal number #7 is a resolution that urges the Tyco board to bring its legal incorporation back to the United States from Bermuda.
Tyco is scheduled to hold its annual meeting in Bermuda on March 6, 2003. Even though the Tyco Board has agreed to study this issue, CalPERS believes the resolution will help keep the company focused.
CalPERS’ letter to Tyco shareowners, which can be found on the fund’s corporate governance web site at www.calpers-governance.org under “Come Home to America,” says, “shareowners lost a significant level of accountability when Tyco reincorporated from Delaware to Bermuda.”
“Bermuda incorporation makes it more difficult for shareholders to hold companies, their officers, and directors legally accountable in the event of wrongdoing; class actions are generally not available under Bermuda law; and shareholders have extremely limited ability to sue officers and directors derivatively on behalf of the corporation,” CalPERS Chief Executive Officer Fred Buenrostro Jr. said in the letter.