The country’s largest public pension fund will vote against keeping Sanford I. Weill on the board of Citigroup because he — as chief executive officer — allegedly played a “significant” part in several scandals that hurt the financial institution.
The California Public Employees Retirement System, also known as CalPERS, announced Monday it will withhold votes from some directors of six other financial institutions, plus Coca-Cola Co., Sprint Corp., Burlington Resources Inc. and PG&E Corp., the parent of Pacific Gas and Electric Co.
“Our vote against Weill is a symbolic vote expressing our belief that he is accountable for the huge scandal, improper practices and conflicts of interest between the investment research department and the investment banking unit within Citigroup,” CalPERS spokeswoman Pat Macht said.
Weill, the company’s CEO from 1998 to 2003, played a “significant role in several scandals to negatively impact the company,” according to a CalPERS statement.
In April 2003, Citigroup paid the highest penalty of any Wall Street firm — $400 million — to settle charges that its Smith Barney unit issued fraudulent and misleading research. Citigroup was one of 10 firms that together paid a total of $1.4 billion to settle with securities regulators.
Weill stepped down as chief executive of the company in October, but retained the job of chairman.
CalPERS controls 26.7 million Citigroup shares, less than 0.5 percent of the total.
“CalPERS’ decision to withhold votes from certain Citigroup directors is unwarranted,” Citigroup spokeswoman Leah Johnson said. “Citigroup adheres to the highest standards of corporate governance, business practices, accuracy and transparency in its accounting and financial disclosure.”
CalPERS, which has assets totaling $164.1 billion, is also withholding votes for CEO Charles Prince, and six other Citigroup directors.
CalPERS also announced Monday it is withholding votes for eight members of the Coca-Cola board of directors.
“With respect to Coca-Cola, there are a number of directors who have conflicting business relationships with the company and therefore it raises concerns about the independence of these directors,” said Edward Fong, a CalPERS spokesman.
The pension fund also announced it will withhold votes for the entire board of directors of PG&E Corp., the parent of Pacific, Gas and Electric Co., and some members of the company’s audit committee.
“The board has failed to implement shareholder-approved proposals,” CalPERS said in a statement.