Calpers names worst companies in annual list

BOSTON, March 25 (Reuters) - Restaurant company Cheesecake Factory (CAKE.O) and furniture maker La-Z-Boy (LZB.N) plus three other companies need to improve their stock performance and governance practices, the biggest U.S. pension fund said on Tuesday.

California Public Employees Retirement System, the $235 billion fund known as Calpers, also named insurance brokerage firm Hilb Rogal & Hobbs HRH.N, health-care equipment supplier Invacare (IVC.N) and home-building group Standard Pacific (SPF.N) to its most recent Focus List.

Making it onto Calpers' annual list is generally considered to be bad for a company's image and business, industry consultants have said, and top executives try to make quickchanges to avoid being embarrassed a second time by the fund.

Calpers, which has publicly named the worst performers since 1992, attracts a lot of attention with its investment selections largely because of its size.

Last year the pension fund named insurance broker Marsh & McLennan and drug company Eli Lilly, but they made enough positive changes to escape being singled out again.

Calpers board members usually complain about a company's lagging stock performance -- The Cheesecake Factory, for example, has underperformed its industry peers by 140.5 percent in the five years ending in February 2008 -- and governance issues.

"Besides having sub-par stock performance, these companies refused to address corporate governance issues that have a bearing on how they perform in the market," Calpers Board President Rob Feckner said about this year's list.

Calpers is trying to eliminate staggered boards of directors at The Cheesecake Factory, Hilb Rogal & Hobbs, La-Z-Boy and Standard Pacific. (Reporting by Svea Herbst-Bayliss, editing by Maureen Bavdek)