TIAA-CREF BLASTED BY SOME MEMBERS OVER GOVERNANCE

COLLEGE professors and teachers all over the country want to know this: How can their pension fund – which is

the largest in the nation – preach corporate governance perfection when it is so imper- fect itself?

The fund has the catchy name of TIAA-CREF,which stands for something like Teachers Insurance and Annuity Association Blah Blah Blah. It has about $300 billion under its management.

And whenever the matter of corporate governance and socially responsible investing comes up,TIAA-CREF is publicly on the side of the angels.

In fact,TIAA-CREF has devoted more than 50 pages on its Web site to its high-minded beliefs. “TIAA-CREF believes that certain principles are the hallmark of an equitable and efficient corporate governance structure,” it says on the site. “TIAA-CREF acknowledges a responsibility to be an advocate for improved corporate governance and performance discipline. ” Bravo! But some of the teachers who have their money in TIAA-CREF suggest that their retirement fund needs to practice what it preaches. And a smallish group of those are expected outside the fund ‘s Dec. 15 annual meeting.

TIAA-CREF management “sets a high standard for dealing with portfolio companies and then they don ‘t live up to it themselves,” says Professor Neil Wollman of Manchester College.

Wollman mainly has gripes about the fund ‘s investing in companies that aren ‘t socially aware investors. But there are also the kind of complaints against TIAA-CREF that the fund makes against others.

This year there will be a resolution to split the fund ‘s chief executive and president ‘s job and one to go back to independent nominating committees for directors. (TIAA-CREF opposes both resolutions. )

Oh,and critics also think the fund ‘s president,Herbert Allison Jr . ,makes too much money. Would TIAA-CREF invest in a company that gave its president $9 million in compensation and a reported $24 million severance

package,like Allison has?

“They communicated the pay package in a way that ‘s at variance with the way it should have been done,” says Professor Curt Verschoor ,a corporate governance expert at the DePaul University School of Accountancy.

The pay was revealed for a time on the group ‘s Web site but not placed in the proxy material.

A spokesman for TIAA-CREF says there have been protests in past years. This year ‘s is bigger, he said,because people are more aware of the issues.

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The good news down at the New York Stock Exchange is that Dick Grasso left behind enough cash for a Christmas party – but just barely.

“They weren ‘t going to pay for the Christmas party this year, but now they will,” said a source of mine who says morale has picked up since John Reed took over as interim chief.

It couldn ‘t have gotten much worse.