FAIRLAWN, OHIO — A. Schulman Inc. is changing the size and makeup of its board of directors shortly after the company was criticized by a major investment group.
But officials claim the decision was not the result of a negative report from the California Public Employees Retirement System, which holds more than 400,000 shares of Schulman stock.
``The company's directors ... agreed that a smaller board with a higher percentage of outsiders is necessary for today's globally competitive company,'' Chairman Robert Stefanko said in a news release.
The publicly held compounder is based in Fairlawn, Ohio.
The CalPERS report, released in late February, had ``no influence whatsoever'' on the decision, Chief Executive Officer Terry Haines said April 16.
The announcement came April 14, the same day Schulman reported that its second-quarter profit for 1998 was 13 percent higher than the 1997 period.
Board members James Berick, Franz Loehr and Larry Kushkin agreed to step down. Loehr is a retired executive with Schulman's European operations while Kushkin is executive vice president of international automotive operations. Berick is chairman of a Cleveland law firm.
Of the remaining 10 directors, three are Schulman employees.
Schulman is prepared to increase the board's size to add ``qualified independent directors,'' Stefanko said.
CalPERS — which holds more than $128 billion in assets — had called for the addition of more independent directors when it launched a review of Schulman earlier this year.
``The current board shields directors from those to whom they should be accountable — their shareholders,'' the CalPERS report said.
Another reason CalPERS cited for the review was decreased profit from 1993-96, which CalPERS claimed resulted from Schulman management's unsuccessful speculation on resin prices. Schulman officials denied such speculation.
CalPERS also claimed Schulman management ``failed to articulate a strategic plan with well-defined goals, a timetable for achieving them and a clear delineation of a reasonable scenario of how to achieve them.''
CalPERS officials could not be reached for comment last week.
In a Jan. 23 report on Schulman, consultants at investment firm PaineWebber Inc. of New York placed the company's estimated 1998 earnings-per-share figure at $1.50 — 5 cents less than Schulman's own estimate at the time. PaineWebber said its estimate was low because of concerns over weakening resin prices and high domestic inventory levels.
A Schulman spokeswoman said April 16 that the company since has revised the figure, but has not released the new estimate.
Schulman, which employs 2,200 at 13 manufacturing sites in North America, Europe and the Asia-Pacific region, posted sales of almost $1 billion in fiscal 1997.