CalPERS Seeks Revision in Sybase Elections

The California Public Employees’ Retirement System asked other Sybase Inc. shareholders to change the board election process so all directors are elected annually, an effort to push the database software company to improve its financial performance. CalPERS, which owns more than 423,000 Sybase shares, in a letter asked for shareholder support to end the board’s system of electing a third of the board every three years. CalPERS also criticized the company’s directors for not owning Sybase stock. The $140-billion fund earlier this year named Sybase to its corporate governance target list of financial underperformers, claiming that about 37% of shareholder capital was destroyed from 1993 to 1996. Shares of Sybase, which makes software to organize big filing cabinets of information, have fallen 50% in the last year as it has lost market share to rivals Oracle Corp. and Microsoft Corp. CalPERS cited the company’s proxy statement, which said $100 invested in Sybase stock on Dec. 31, 1992, would have been worth only $54 five years later. By contrast, the same $100 invested in an index of the company’s peer group would have appreciated to $307. “Clearly Sybase management, the Sybase board and CalPERS have the same long-term objective: to create shareholder value,” said Sybase Chief Financial Officer Jack Acosta. “We don’t think staggering the board has anything to do with creating shareholder value.” He said the directors who don’t own Sybase shares are considering owning them. Shares of the Emeryville-based firm fell 13 cents to close at $8.25 on Nasdaq.