AIG Shows Up on ‘Laggard’ List
Citing concerns over corporate governance and company performance, the California Public Employees Retirement System on Wednesday said it placed American International Group Inc. and four other firms on its focus list of “corporate laggards.”
American International Group “tops the list following allegations of widespread accounting fraud and other corruption that cost CalPERS more than $240 million in losses,” the pension fund said in a statement.
The $186-billion California Public Employees’ Retirement System said AT&T; Corp., Delphi Corp., Novell Inc. and Weyerhaeuser Co. also made its focus list.
“These five companies are now on our radar screen for their poor corporate governance and, in many cases, poor performance that has economically damaged share owners,” said Rob Feckner, CalPERS’ president. “We will press for needed reforms to restore long-term profitability and investor confidence.”
CalPERS said it placed AIG on its focus list after the insurer’s shares dropped more than 21% in the year ended March 31 and because regulators are probing its accounting.
“Potential fraud and corruption at AIG have cost working families millions of dollars and threatened the security of their pensions,” said Charles Valdes, chairman of CalPERS’ investment committee.
AIG spokesman Joe Norton noted that the company has committed itself to improved transparency and corporate governance and an open dialogue with regulators.
Novell was “disappointed to be included on a list like this because we don’t believe it’s warranted,” said spokesman Bruce Lowry, adding that the network software maker has sought to address CalPERS’ concerns.
Delphi spokeswoman Claudia Baucus said the auto parts maker respected CalPERS’ opinion and would “continue to make ourselves available to them to discuss these issues.”
AT&T; and Weyerhaeuser officials had no comment.
CalPERS said AT&T; is on its list because its shares are down 74% over the five years ended March 31 and because $41 million could be paid to its executives should SBC Communications Inc. acquire the company.
Novell made the pension fund’s list because its stock price declined 47% in the year ended March 31 and because it failed to draft a “true” performance-based executive compensation plan, CalPERS said.
Delphi and Weyerhaeuser made the list because their boards have not implemented successful shareholder proposals to declassify their respective boards, CalPERS said.
AIG shares fell 57 cents to $51.01; Delphi dropped 17 cents, to $3.59; and Weyerhaeuser subtracted 27 cents to $65.42. All trade on the New York Stock Exchange. Novell added 6 cents to $6.04 on Nasdaq, and AT&T; fell 26 cents to $18.43 on the NYSE.
