Calpers also opposed the reelection of Disney chief executive and chairman Michael D. Eisner to the company's board this year, citing Disney's poor performance and what Calpers viewed as a weak governance structure. At the company's annual meeting in March, 43 percent of Disney shareholders voted against Eisner's reelection. Eisner then announced that he would relinquish the chairmanship and later said he would retire from the company in 2006.
Harrigan was among the first public pension officials to call for Grasso's resignation last year after the NYSE disclosed that it had awarded Grasso a lump-sum payment of $139.5 million, earned mostly during his eight years as chairman. Pressure from Calpers was widely credited with knocking out what little support Grasso had left on the NYSE board. Calpers later filed a class-action lawsuit against the NYSE and seven of its trading firms, alleging anti-investor practices. More recently, Calpers announced a campaign to fight what the fund views as excessive executive compensation at many companies.
For the most part, other shareholder groups supported Calpers's activism under Harrigan. But there were also some missteps, notably the pension fund's staunch opposition in March to the reelection of investor Warren E. Buffett to the board of the Coca-Cola Co. (Buffett is a major shareholder and board member of The Washington Post Co.)
At the time of the Coca-Cola vote, Calpers said it was following its policy of opposing directors who approve allowing a company's outside auditors to perform non-audit work for the company. Calpers officials said such audit firm conflicts helped create abuses at Enron Corp., WorldCom Inc. and other companies.
Other shareholder groups politely backed away from Calpers, saying the fund was being too inflexible. Calpers executives later said they would reexamine their policies for withholding votes from directors.
Shareholder groups yesterday described Harrigan's ouster as unfortunate and part of an effort by companies to push back against some reforms that executives view as costly and unnecessary. But they also said it was unlikely to change Calpers's activist approach.
Harrigan "is in part paying the price for some institutional fumbles, but that's the nature of the job -- as ousted corporate chief executive officers have learned," said Nell Minow, co-founder of the Corporate Library, a corporate governance research group. "The main thing is that the commitment to shareholder issues is strong, broad, and deep in the Calpers system."
The Calpers board has 13 members, most of whom are widely seen as holding views similar to Harrigan's on shareholder issues. So the next president is not expected to pursue a radically different agenda.
Feckner, chairman of Calpers's investment committee, echoed that view, saying he would serve as interim president if Harrigan is ousted and that whoever becomes the next full-time president would follow the same agenda.
