The California Public Employees’ Retirement System(CalPERS)is asking Shaw Group’s shareholders to support a proposal requiring approval of excessive severance compensation for departing executives.

The proposal would require shareowner ratification of any severance packages worth more than 2.99 times an officer’s salary and target bonus.

“We are not seeking to limit severance payouts,” says Christianna Wood, CalPERS senior investment officer, global equity, “but we do believe that shareowners should have the ability to approve certain large payouts.”

Chief investment officer Russell Read says the fund is interested in paying for performance. “However, despite some short-term improvement in its share price, the company has underperformed its peer index by 38% over the last five years.”

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To comment on this story email craig.sebastiano@rci.rogers.com.

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