CalPERS Puts Shell, Disney on Focus List

The California Public Employees’ Retirement System targeted Walt Disney Co., Royal Dutch Shell Petroleum Co. and two other firms to be the focus of the pension fund’s corporate-governance campaign this year.

CalPERS, the biggest U.S. pension fund, wants Disney, Shell, Emerson Electric Co. and Maytag Corp. to make changes to their boards and to improve their stock performance. The system picks as many as 10 companies each year for its Focus List, based on performance, corporate governance and other factors, CalPERS said.

“Corporate governance reforms are needed for these companies to restore long-term profitability and investor confidence,” CalPERS President Sean Harrigan said.

Companies named to the Focus List from 1992 to 2001 saw their stocks rise 46% on average a year later, CalPERS said.

Last year, CalPERS cited Xerox Corp., JDS Uniphase Corp. and Manugistics Group Inc. Xerox gained 28% over the last 12 months, JDS lost 17% and Manugistics lost 29%.

CalPERS uses a formula to measure a company’s net operating profit after tax, minus its cost of capital. The pension fund says that by using the formula and companies’ stock performance, it can find cases in which poor performance is indicative of underlying financial problems, as opposed to industry factors.

Burbank-based Disney made the list because of a tug of war over its management. The company’s shares are up 21% over the last 12 months.

A Disney spokesman declined to comment. CalPERS owns 9.4 million shares, or 0.46%, of Disney stock outstanding.