|
Investment
Office
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(916) 795-3400
phone (916) 796-2842 fax
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www.calpers.ca.gov
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April
23, 2009
Dear
Hospitality Properties Trust Shareowner:
VOTE FOR PROPOSAL #3 TO
DECLASSIFY HOSPITALITY PROPERTIES’ BOARD
We are
writing to urge you to vote FOR
Proposal #3 at Hospitality Properties Trust’s May 15, 2009 annual meeting.
CalPERS is the nation’s largest public pension fund with approximately $165
billion in assets. As of record date March 17, 2009, CalPERS owned
approximately 615,000 shares of Hospitality Properties. As a
significant long-term shareowner of Hospitality Properties Trust, we seek your
support on Proposal #3, a non-binding proposal asking Hospitality Properties to
take the steps necessary to declassify the board and provide for the annual
election of all Trustees.
LONG-TERM UNDERPERFORMANCE
AT HOSPITALITY PROPERTIES
|
Time
period
ending
3/31/2009
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Hospitality
Properties
Trust
(HPT)
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Russell
1000
Index
|
Relative
Return
Russell
1000
Index
|
Real
Estate
Russell
1000
GICS
Industry
Peer
Index
|
Relative
Return
Russell
1000
GICS
Industry
Peer
Index
|
|
5
years
|
-56.5%
|
-20.7%
|
-35.8%
|
-20.2%
|
-36.3%
|
|
3
years
|
-59.7%
|
-34.7%
|
-25.0%
|
-43.0%
|
-16.7%
|
|
1
year
|
-57.9%
|
-38.3%
|
-19.6%
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-50.8%
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-7.1%
|
Source:
Factset
HOSPITALITY PROPERTIES’
BOARD IS NOT ACCOUNTABLE TO SHAREOWNERS
CalPERS
believes fully accountable corporate governance structures produce, over the
long-term the best sustainable returns to shareowners. As evidenced by the
company’s significant absolute and relative shareowner value destruction, the
current corporate governance structure has failed to focus the Board’s attention
on optimizing the company’s return to shareowners, and further insulate the
Board of Trustees from shareowner accountability. To date, the Board has failed
shareowners by refusing to:
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|
·
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Seek
shareowner approval to remove its classified board
structure
|
|
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·
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Grant
shareowners the right to amend the
bylaws
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|
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·
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Seek
shareowner approval to remove its supermajority voting
requirements
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|
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·
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Grant
shareowners the right to act by written consent or to call special
meetings
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|
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·
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Seek
shareowner approval for its poison
pill
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|
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·
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Allow
shareowner ratification of its
auditor
|
CalPERS Public
Employees’ Retirement System Shareowner Alert
IMPROVED GOVERNANCE LEADS TO
IMPROVED FINANCIAL PERFORMANCE
As a
long-term shareowner, CalPERS is very concerned with the company’s
accountability to its shareowners and its commitment to good corporate
governance. We believe such accountability as evidenced by governance
practices is closely related to financial performance.
|
|
·
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Harvard
Professor Lucian Bebchuk and associates published a study which found that
companies with staggered boards, poison pills, supermajority voting
requirements (for mergers and charter amendments), and limitations to
shareowner bylaw amendments deliver less shareowner value than those
companies that do not have such measures in place. At this time, Hospitality Properties
currently employs five of the six entrenchment
provisions. See “What Matters in Corporate Governance”
by Lucian Bebchuk, Alma Cohen and Allen Ferrrell, Harvard Law School,
Discussion Paper No. 491 revised
03/2005.
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VOTE “FOR” ACCOUNTABILITY,
VOTE "FOR" PROPOSAL #3
Every
shareowner has the right to vote, please take the time to vote! We
urge you to vote in favor of proposal #3 to declassify the board and provide for
annual elections. VOTE "FOR" PROPOSAL
3!
Thank
you for your support on this very important issue.
Very
truly yours,
Eric
Baggesen
Senior
Investment Officer – CalPERS Global Equity
PLEASE NOTE: The cost of this
solicitation is being borne entirely by CalPERS and is being done through the
use of the mail and telephone communication. CalPERS is not asking for your
proxy card. Please do not send us your proxy card but return it to
Hospitality Property Trust.
For
additional information, please contact Garland Associates, Inc. Tel:
561-366-1165
CalPERS Public
Employees’ Retirement System Shareowner Alert