The board of Panama-based McDermott International Ltd. will consider relocation after being swayed by "Come Home to America" activists.

Bowing to pressure from the California Public Employees' Retirement System (CalPERS) as well as activists from the American Federation of State, County and Municipal Employees ("AFSCME") Pension Plan who last month came to Bermuda to lobby for Tyco's repatriation, the McDermott chairman and chief executive agreed on Tuesday to undertake a financial analysis of returning the company's headquarters to the United States.

"We believe it is in the best interests of our company and shareholders to diligently examine this issue," said Bruce W. Wilkinson, company chairman and chief executive officer.

The company has left itself several get-out clauses: the decision to repatriate will depend on a variety of factors, including a tax neutral and otherwise favourable cost analysis by independent consultants, the final resolution of Chapter 11 proceedings for a subsidiary and the approval of the board of directors.

But in the event that the tax, costs and other considerations impacted by re-domestication are believed by McDermott's board to be in the best interests of the shareholders, it will include a resolution recommending relocation with their next proxy.

If the board's conclusions lead it to oppose such a resolution, it has agreed that CalPERS and AFSCME may include a 500 word statement with the ballot.

McDermott is just one of several publicly listed US corporations which the lobbyists have targeted for being based in "offshore tax havens".

At Tyco's AGM in March, they said that they would soon bring pressure to bear on Coopers Industries, Nabors Industries and Ingersoll Rand which are based in Bermuda.

The $131 billion CalPERS fund and the $600 million AFSCME pension plan have a small shareholding in McDermott which allows them to propose a repatriation resolution when the company has to ballot shareholders.

The company, which reported $1.7 billion in annual revenue last year, has a market capitalisation of $194.6 million.

California Treasurer Phil Angelides has been an outspoken critic of US companies who move their headquarters offshore. He is supporting two state Senate bills that would close tax loopholes and ban expatriate companies from doing business with state agencies.

He was quoted in the Sacramento Bee newspaper as saying: "This is a very significant breakthrough. We're going to keep the attention on this issue."

Chief executives, he said, were "concerned about the growing stigma of this practice".