Angelides Urges Scrutiny of 4 Firms
Four companies -- AES Corp., UnitedGlobalCom Inc., UnumProvident Corp. and Omnicare Inc. -- should be challenged by investors because of the large percentage of stock-based pay awarded to their top executives, California Treasurer Phil Angelides said.
At each company, more than half of the stock options and grants the company awarded went to its top five executives, Angelides said.
The California Public Employees’ Retirement System, or CalPERS, the largest U.S. public pension fund, and other pension funds should pressure the companies to change their practices, he said. Angelides is on the boards of CalPERS and the California State Teachers’ Retirement System, the third-largest pension fund, and plans to run for governor in 2006.
“There is too little relationship between the pay of executives and the performance of public companies over the long term,” Angelides said at a news conference in Sacramento. “Executive compensation has left the realm of reality.”
UnumProvident spokesman Jim Sabourin said Angelides’ claim was “a little misleading” because it included more than $17 million in severance paid to UnumProvident’s former Chief Executive J. Harold Chandler.
Representatives of AES, Omnicare and UnitedGlobalCom did not immediately comment.
CalPERS’ governing board will consider a plan Monday in which the pension fund would press for executive compensation reforms with the Securities and Exchange Commission, the financial exchanges and the compensation consulting industry, said CalPERS spokesman Brad Pacheco.
“It also calls for us to wage a campaign against individual compensation committee directors who support egregious pay packages and companies that have the worst compensation practices, as well as recognize corporations who are leaders in pay for performance,” Pacheco said.
CalPERS has increased pressure on company boards after a wave of corporate scandals beginning in 2001. Republicans have complained that Angelides, a Democrat, is grandstanding to advance his expected gubernatorial campaign.
