CalPERS' investment committee will consider a three-year, six-pronged strategic plan for promoting nationwide executive compensation reform "in order to raise the level of accountability of boards and compensation committees to shareowners," according to the proposal. The committee of the $170.7 billion California Public Employees' Retirement System, Sacramento, will consider the recommendation, designed for 2005 through 2007, at its Nov. 15 meeting.
The proposal, developed by staff, calls for three macroeconomic strategies, designed to promote national reform, including calling for more SEC rule-making on executive compensation disclosure; stock exchanges; and the compensation consulting industry. It also calls for three microeconomic strategies, designed to address reform on a company-by-company basis, of "engaging the largest companies to promote compensation reform; enhancing compensation committee accountability; and recognizing pay-for-performance leaders."
CalPERS staff believes "the philosophy and practice of executive compensation in the U.S. needs to be more performance-based," according to the proposal.
