Pension fund seeks Gateway board changes
Calpers, America's biggest pension fund, wants Gateway to change the way it elects board members. It is unhappy with the PC maker's financial performance, and it reckons that the directors of the company have it too cosy, the pension fund told the San Jose Mercury.
Currently, Gateway's six board members have three years tenure and only one third are put up for election each year. Calpers wants Gateway to move to annual re-election for the entire board, it says in a filing submitted to the Securities and Exchanges Commission.
By going public now, Calpers may intend to shame Gateway into adopting accepted ideas on best practice for corporate governance. But Gateway is digging in its heels - it says the current system provides stability while the company is restructuring.
Calpers own 1.1 million shares in Gateway, while Ted Waitt, the founder and CEO, owns 30 per cent of the 324 million outstanding shares.
It will be interesting to see if it can muster enough support at a Gateway shareholders' meeting held on May 16, to put its proposal to the vote at the next shareholders annual meeting. Even if Calpers succeeds in the first round, it will be difficult to overcome Waitt's voting block. ®