In a letter to CalSTRS Chairman Gary Lynes and other CalSTRS members, Westly called for the $116 billion fund to develop a strategy to seek shareholder approval of corporate compensation policies. Further, Westly’s letter wants the pension fund to shareholder approval of corporate compensation policies.
Among the strategies suggested by Westly is the development of a corporate governance watch list for poor performing companies. Westly plans to address the issue at the July meeting of CalSTRS.
“We should make clear that companies that are underperforming their peers should not be overcompensating their executives,” Westly said in the letter. “Similarly, CalSTRS should recognize companies with model executive compensation policies as the leaders that they are.”
Westly’s letter follows his earlier public questioning of the California Public Employees Retirement System’s (CalPERS) proxy voting record. In May, Westly questioned whether the two-year proxy voting policy might not be achieving its stated goals of improving auditor independence (See Westly Questions CalPERS, CalSTRS Proxy Voting ).
He was later joined by CalPERS President Sean Harrigan, who told the Wall Street Journal that the $165.8 billion fund is going to “revisit the policy.” The review will come, Harrigan said, because the pension fund did not realize that so many of its votes would be affected by the policy when its board unanimously approved the standard late last year (See CalPERS Rethinking Proxy Voting Policy ).