WEST SACRAMENTO, Calif.--()--Jack Ehnes, chief executive officer of CalSTRS, the California State Teachers’ Retirement System, made the following statement regarding CalSTRS’ intent to vote its 5.3 million shares, worth $313.5 million, at the upcoming shareholder meeting:
“CalSTRS believes former and current Wal-Mart executives and board members breached their fiduciary responsibilities. They did so by failing to respond to indications of a pattern of unethical conduct in the company’s foreign operations. Beyond that, CalSTRS believes that in some cases, Wal-Mart leadership actively suppressed an internal investigation which would have brought these improper actions to light.
Based on these allegations, which indicate a breakdown of corporate governance and lack of oversight that should have averted this situation, CalSTRS does not have confidence that the current board has the independence and leadership needed to address these difficult issues.
CalSTRS will vote its more than five million investor shares against the entire board’s reelection at Wal-Mart Stores, Inc. annual meeting. We encourage our fellow shareholders to do the same.
As a long-term investor, CalSTRS wants Wal-Mart to have long-term value for our members, the teachers of California. CalSTRS also thinks that ethical corporate governance practices lead to sustained profitability. Wal-Mart has established high principles for ethical behavior. Now it needs to live by them, not just on the retail level, but in the executive suites and the boardroom.”
The California State Teachers’ Retirement System, with a portfolio valued at $153.7 billion as of April 30, 2012, is the largest teacher pension fund and second largest public pension fund in the United States. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and defined contribution plans, as well as disability and survivor benefits. CalSTRS serves California's 856,000 public school educators and their families from the state’s 1,600 school districts, county offices of education and community college districts.