When Home Depot shareholders gather in corporate-tax-free Delaware next week, this issue of how much the retailer pays Bob Nardelli, it’s CEO, will crowd out other items on the agenda. One of the company’s major institutional investors, Calpers (California Public Employees’ Retirement System), in a letter dated May 15th, urged stockholders to vote for an advisory proposal drafted by the American Federation of State, County and Municipal Employees, or AFSCME, a union, that would allow investors to vote yes or no on the compensation committee report. This marks the first letter the California pension fund has sent to fellow shareholders this year as part of a campaign to allow shareholders more of a say in executive compensation. Calpers, which own $415.1 million of Home Depot stock, and is also the largest institutional investor in Wal-Mart. Under the AFSCME plan, the stockholder vote would be advisory only, but the proposal highlights the fact that Home Depot awarded Nardelli nearly $200 million in compensation over the past five years, while the company’s a stock tumbled by 12% during the same time period. Home Depot stock was at $40.50 earlier this week, compared $69 at the end of 1999. The resolution argues that pay should be linked to performance. Marketwatch.com also reports that a two other public pension funds plan to withhold votes from any Director of the Board who approve the Home Depot executives’ pay packages. The state of Connecticut also owns Home Depot stock, and has threatened to withhold votes from the compensation committee members of those companies.
For earlier stories on Calpers, and other institutional investors in big box stores, search Newsflash by “Calpers.” Now if we could just get the big pension funds like Calpers and TIAA-CREF to pay more attention to the socially irresponsible practices of companies like Wal-Mart, maybe these large retailers would take notice and behave more responsibly. But Calpers and CREF continue to invest in companies that create sprawl and economic exploitation. CREF says it invests for “the greater good,” yet holds a large amount of Wal-Mart stock. The only “greater good? from the CREF investment is to Wal-Mart, not to CREF investors.