Weekly interest and loan rates | Home values Northwest stock contest 2004 | Consumer affairs

State pension fund joins bid to oust Safeway CEO

By Bloomberg News

E-mail this article Print this article Search archive

The Washington pension fund's public-markets committee voted yesterday to ask the fund's staff to draft a letter to Barclays Global Investors. The committee wants to express support for the ouster from the Safeway board of Chairman and Chief Executive Steven Burd and two directors investors say have conflicts because of business dealings with the company.

"We need to give a very clear message as a fiduciary," state Treasurer Michael Murphy said at the committee meeting in Olympia. "This is not something we ought to tolerate."

Burd is under fire from investors for failing to integrate acquisitions effectively, spur earnings growth and for labor practices that led to a 4 1/2-month industry strike in Southern California that was settled earlier this year. William Tauscher and Robert MacDonnell also are up for re-election at a May 20 shareholders meeting.

Barclays manages the stock index fund that holds Washington's $12.6 million of Safeway shares and the proxy voting rights to the shares.

The Washington committee also asked staff to draft a letter to Kohlberg Kravis Roberts voicing concern that the buyout firm is devoting time to helping manage Safeway that should be spent managing the funds in which Washington is invested.

KKR's current and former partners and an affiliated executive hold four of Safeway's nine board seats. Washington's pension fund is KKR's largest investor. KKR hasn't owned Safeway shares since 2000. The draft letters will be considered by the full Washington investment board April 15.

The Oregon Public Employees Retirement Fund yesterday also joined the campaign to oust the three Safeway directors, bolstering the campaign launched by several state pension funds in March.

The Oregon pension fund was the only group to publicly announce support for the campaign after a meeting Monday with 93 Safeway investors, pension-fund managers and analysts. Together they hold 55 percent of Safeway shares.

Copyright © 2004 The Seattle Times Company