California Public Employees' Retirement System, Sacramento, placed American International Group, New York, on the $183.6 billion pension fund's focus list of poor financial and corporate governance performers, said Brad Pacheco, CalPERS spokesman.
The move follows allegations of widespread accounting fraud and other corruption at AIG that caused the stock to lose more than 21% of its value in the year ended March 31. That drop led to $240 million in losses for CalPERS, Mr. Pacheco said. In mid-February, federal and New York state regulators announced AIG was being investigated on allegations of bid-rigging and developing sham transactions to boost the stock price.
"CalPERS' decision to keep the heat on AIG sends a clear signal that taxpayers, shareholders and pensioners are tired of literally paying the price for corporate corruption," Phil Angelides, California state treasurer, said in a news release.
Mr. Angelides, who is also on the CalPERS board, has been urging the fund and the $127 billion California State Teachers' Retirement System, Sacramento, to push for reforms at AIG that would protect shareholders and to enlist other institutional investors in the reform efforts.
Also on the CalPERS focus list are AT&T Corp., Bedminster, N.J.; Delphi Corp., Troy, Mich.; Novell Inc., Waltham, Mass.; and Weyerhaeuser Co., Federal Way, Wash.
"These … companies are now on our radar screen for their poor corporate governance and in many cases poor performance that has economically damaged shareowners," said Rob Feckner, CalPERS president, in a news release. "We will press for needed reforms to restore long-term profitability and investor confidence."
The focus list is generated from the CalPERS' investments in more than 1,800 U.S. corporations. It is based on the companies' long-term stock performance and corporate governance practices, and an economic value-added evaluation.
AIG spokesman Joe Norton could not be reached for comment.
