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CALIFORNIA CORPORATE & SECURITIES LAW

CalPERS And Securities Lending – Waiting For Godot?

California Government Code Section 7603 is short and unambiguous: All loans of securities shall be made pursuant to one of the standardized security loan agreement forms, as developed by the administrators of the State Pooled Investment Account (as authorized by Section 16481 of the Government Code) or the Public Employees Retirement System or the State…

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Is The SEC’s Universal Proxy Proposal A Product Of Agency Capture?

More than six decades ago, the late Professor Marver H. Bernstein published his theory of regulatory capture in Regulating Business By Independent Commission (Greenwood Press 1955).  According to his theory, agencies follow a life cycle of birth, maturity and old age.  As an agency enters senescence, it inevitably becomes captive to the groups that it regulates.…

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CalPERS To Consider Support For Corporate Political Spending Disclosure Mandate

Next week, the California Public Employees Retirement System will consider a staff recommendation “to update the legislative and policy guidelines to include support for Securities and Exchange Commission (SEC) rulemaking on disclosure of the use of corporate resources for charitable and political activities.”  Under the California Constitution (Art. XVI, § 17(b)), the members of CalPERS’…

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What Exactly Is “Constructive Engagement”?

Yesterday, I wrote about SB 185 (De León) which mandates that California’s two giant pension funds to liquidate their investments in thermal coal companies on or before July 1, 2017.  One aspect of the bill that I didn’t cover yesterday is the additional requirement that CalPERS and CalSTRS “constructively engage with a thermal coal company to…

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Do Public Pension Funds Breach Their Fiduciary Duties By Pursuing Social Issue Proposals?

Yesterday, UCLA Law School Professor Stephen Bainbridge noted the publication of a recent study that reaches some devastating conclusions for public pension funds.  The study by Professor Tracie Woidtke at the University of Tennessee found that “public pension funds’ ownership is associated with lower firm value”.  To make matters even worse, Professor Woidtke found: Social-issue…

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CalPERS And Pay For Performance

A few weeks ago, CalPERS’ Director of Corporate Governance, Anne Simpson, sent a letter to the Securities and Exchange Commission in support of the SEC’s proposed pay for performance disclosure rule.  Her letter notes CalPERS’ belief that “Compensation of executives in publicly listed companies should be driven predominantly by performance.”  CalPERS Global Governance Principles, California Public…

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CalPERS And Pay Equity

The Securities and Exchange Commission has given notice of its intent to adopt final pay ratio disclosure rules at its meeting next week.  In applauding the SEC’s proposed rules, the California Public Employees’ Retirement System observed: Finally, we believe the ratio will be a number which prompts commentary and discussion, providing an important data point…

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Is Buying Stock The Same As Providing Capital?

A report issued earlier this week by the California Public Employees’ Retirement System (CalPERS) implies otherwise.  The report entitled “CalPERS for California 2014” trumpets CalPERS’ investment in California businesses and its indirect support for jobs here.  CalPERS claims to have invested in 615 publicly traded companies headquartered in California.  In 21 of these companies, CalPERS’ investment…

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CalPERS Board Member Contests Attorney General’s Conflicts Position

Last December, I wrote about J.J. Jelincic, a long-term CalPERS employee who was elected for a four-year term to the Board of Administration of the California Public Employees Retirement System (aka CalPERS). Following Mr. Jelincic’s election, CalPERS’ Board voted to release him from his duties as a CalPERS employee so that he could work full-time…

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CalPERS Global Governance Program Targets Income Inequality

The Investment Committee of CalPERS’ Board of Administration will meet next Tuesday.   The committee, which is comprised of all 13 members of the Board of Administration, is responsible for, among other things, investment strategies and policies.  On the agenda is for next week’s meeting is an update on the fund’s strategic priorities.  The slide…

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