CalPERS is seeking shareholder support for a resolution it is sponsoring at Lone Star Steakhouse & Saloon Inc.s annual meeting Friday that the board comprise a majority of independent directors.
The $175 billion California Public Employees Retirement System, Sacramento, said Wichita, Kan.-based Lone Star ratified transactions benefiting top management and board members while the companys stock performance has lagged sharply. In particular, Lone Stars board had authorized repricing or replacing underwater stock options four times since April 1997, affecting a total of 14.5 million shares. Many of these actions directly benefited Chairman and CEO Jamie Coulter, CalPERS claimed.
In its proxy statement, Lone Star opposed the CalPERS proposal, saying the funds proposed definition of independent is broad and arbitrary. It also opposed a resolution from the Amalgamated Bank of New York that seeks to push the company to abandon its classified board structure.
Lone Star officials did not respond to a request for comment.