CalPERS will not issue a focus list this year, the first time since 1988 when it began the public identification of companies for poor shareholder performance and corporate governance.
The $209.1 billion California Public Employees’ Retirement System, Sacramento, was considering 15 companies in the screening process for the focus list, Clark McKinley, CalPERS spokesman, said in an interview.
But the companies improved their shareholder performance and governance practices after CalPERS’ corporate governance staff engaged all but one of the companies to discuss problems with their officials, he added. The lone company is in a pending acquisition, he said.
Each of the 14 companies the staff engaged had positive one-year total stock performance.
CalPERS declined to release the names of the companies; it does not publicly identify them during its engagement process, Mr. McKinley said. Identification is made only if the fund decides to put them on its focus lists.
“So it worked,” Mr. McKinley said of the focus list process. “The whole point is not to embarrass them but to get improvements, and it worked.”
A Wilshire Associates study shows CalPERS’ focus list companies beat benchmarks by an average 15.4% five years after listing, Mr. McKinley said in a statement announcing that no list would be issued this year.
CalPERS has “no plan to abandon the focus list process,” Mr. McKinley said in the statement.
The focus list identifies companies in CalPERS’ domestic internal equity portfolio that “resist efforts to adopt governance practices aimed at improving stock performance,” according to a CalPERS statement last year defining the process. The focus list has ranged from five to 11 companies since CalPERS began the process.