WEST SACRAMENTO, Calif.--(BUSINESS WIRE)--The California State Teachers’ Retirement System (CalSTRS) and Relational Investors LLC (Relational) commended The Timken Company’s plan, announced today, to spin off its steel division into a separately traded public company.
A CalSTRS-sponsored shareholder proposal, supported by Relational, recommending that the Timken board form a special committee to move forward immediately with a spinoff, attracted the support of a majority of shareholders at Timken’s annual meeting held on May 7, 2013. After the vote the board promptly formed such a committee, chaired by lead independent director Joseph Ralston.
“We fully support and commend Timken’s decision announced today because it means they’ve listened to their shareholders,” said CalSTRS Director of Corporate Governance Anne Sheehan. “In particular, we are grateful to the Special Strategy Committee for its diligent work and to the entire Timken board for responding to the will and long-term interests that Timken’s shareholders expressed at the annual meeting. We firmly believe this action will create long-term benefit for the shareholders.”
Relational’s co-founder, Ralph Whitworth, added, “The plan announced today ensures the long-term vitality and competitiveness of Timken as two separate companies, both of which will lead their respective industry segments for operating excellence. It’s the right answer for all constituents, including the city of Canton, which will now be the home of two world-class companies.”
The California State Teachers’ Retirement System, with a portfolio valued at $170 billion as of July 31, 2013, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans. CalSTRS also provides disability and survivor benefits. For 100 years, CalSTRS has served California’s public school educators and their families, who today number 862,000 from the state’s 1,600 school districts, county offices of education and community college districts.
Relational Investors LLC, founded in 1996, is a privately held, multi-billion dollar asset management firm and registered investment adviser. Relational invests in publicly traded companies that it believes are undervalued in the marketplace. The firm seeks to engage the management, board of directors, and shareholders of its portfolio companies in a productive dialogue designed to build a consensus for positive change to improve shareholder value.