CalPERS, the world's largest pension fund, has voiced its dissatisfaction with five US companies that it feels have performed poorly, both financially and in terms of corporate governance.
Top of CalPERS list of underperforming companies is Warnaco, the New York based manufacturer and distributor of Calvin Klein clothing. Warnaco finds it way on to CalPERS’ “focus list,” due to poor governance practices and relative financial performance. Examples cited include a classified board, no lead independent director and a combined chairman and ceo position.
Following the release of the “focus list”, William Crist, president of CalPERS Board of Administration, issued a warning to the companies on the list: As shareowners, we take performance and corporate governance issues very seriously. We expect the management and boards of these companies to address their problems. Timely remedies are in the best interests of everyone.
Warnaco is joined by Circuit City of Richmond, Virginia; Lance of Charlotte, North Carolina; Metromedia of East Rutherford, NJ; and Ralcorp of St Louis, Missouri on the pension fund’s list of underperforming companies.
Warnaco’s stock underperformed its peers in the Russell 2000 consumer Discretionary and Services Index by 72% for the five-year period ended July 31 2000.
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