Sean Harrigan, president of California's public employee pension fund and a major figure in the shareholder activist movement, was ousted from his job today.
The five-member State Personnel Board voted 3 to 2 against extending Harrigan's term on the board of the nation's largest public pension fund, which has $177.8 billion in assets. Harrigan's current term ends in January.
In Harrigan's place, the personnel board voted to send Ron Alvarado to be its new representative in the pension fund's leadership. Alvarado, a Republican real estate developer, was among the three personnel board members who voted for Harrigan's ouster.
Harrigan, 57, has used his perch at the helm of the pension fund to lead high-profile campaigns against what he views as excessive executive compensation and poor corporate governance practices. He led fights against chief executives at such companies as Citigroup Inc., Walt Disney Co. and Safeway Inc. He had a major role in bringing down Dick Grasso as chairman of the New York Stock Exchange.
Along the way, Harrigan received admiring praise from shareholder groups and occasional complaints that the California Public Employees' Retirement System (Calpers) had gone too far.
Harrigan was fiercely opposed by business groups and California Republicans who said his background as an official of the United Food and Commercial Workers Union clouded his judgment as Calpers president, especially during the pension fund's campaign to oust Safeway chief executive Steven A. Burd. The campaign took place as Safeway was battling union officials over labor issues. Burd won 83 percent support from Safeway shareholders.
In a prepared statement yesterday, Harrigan acknowledged that he probably would not receive enough votes today. "Corporate governance opponents are trying to silence the voice of Calpers, which has always stood for shareowners' interests against corporate greed," he said.
Rob Feckner, chairman of Calpers's investment committee, yesterday accused California Gov. Arnold Schwarzenegger, a Republican, of succumbing to pressure from big businesses and maneuvering to have Harrigan ousted. "I think there was pressure from the governor," Feckner said. "Corporate America is not happy with some of the reforms that Calpers has put forward."
A spokesman for Schwarzenegger, Vince Sollitto, called the accusations "paranoid musings" and said the governor had exerted no influence on the personnel board vote. "The representative to Calpers from the State Personnel Board is elected by the five personnel board members. This governor has appointed one of them," Sollitto said yesterday. "You do the math."
Nonetheless, California business groups and the state Republican Party have been highly critical of Harrigan. State Republican Party spokeswoman Karen Hanretty said yesterday that Harrigan's removal would be a "step in the right direction" and accused him of "favoring and actually doing the bidding" of organized labor. "At the end of business on Wednesday, Sean Harrigan will be wishing he got the same vote of confidence that Steven Burd did," she said.
