Governance in Brief
March 12, 2020 | Editor: Martin Wennerström
Dorsey stays on at Twitter, following Elliot truce
US tech giant Twitter announced on March 9, 2020 that it had reached an agreement with activist investor Elliott Management Corp. (“Elliott”) to overhaul the board, ensuring that founder Jack Dorsey remains CEO. As part of the deal, Elliot and private equity firm Silver Lake will each secure a seat on Twitter’s board, with Twitter to appoint a third new independent director “in the near term.” In addition, Silver Lake will make a USD 1 billion investment in Twitter, to be used by the latter to fund a USD 2 billion share repurchase program. Twitter also agreed to form a five-member management structure committee comprising both Elliott’s and Silver Lake’s representatives, charged with evaluating the CEO succession plan and making recommendations on abolishing the company’s classified board.
The development is perceived as Twitter’s attempt to fend off a proxy fight with Elliot, which had reportedly started a campaign to remove Dorsey as CEO and install four nominees on the board. The campaign had allegedly been prompted by Dorsey’s announcement that he would move to Africa and manage both Twitter and mobile payments firm Square Inc. remotely.
Germany’s Innogy to be delisted
German energy group Innogy SE will be delisted after E.ON secured approval on a squeeze-out of minority shareholders in exchange for EUR 42.82 per share.
The March 4, 2020 EGM saw 99.76% of the votes cast in favor of the deal, with around 91% of the votes represented at the meeting and E.ON holding 90% of Innogy’s voting rights at the time. German shareholder associations DSW and SDK did not support the deal, with SDK spokesperson Joachim Kregel arguing that it undervalued Innogy shares and that a fair tender price would have been EUR 52 per share.
In 2019, E.ON acquired a controlling stake in Innogy from the latter’s former parent RWE in a complex asset swap, in a perceived attempt to address the growing demand for renewable energy.
UK firms to face scrutiny over climate-related disclosure
The UK accounting watchdog the Financial Reporting Council (“FRC”) has announced a “major review” of how companies report on the impact of climate change on their business, with FRC CEO Sir Jon Thompson noting that auditors should “properly challenge management” on reporting quality. The development occurs after the FRC’s Financial Reporting Lab released an October 2019 report revealing a gap between investor expectations and company reporting on climate-related issues. Now, the FRC announced that it will also assess whether firms are reporting according to the Task Force on Climate-related Financial Disclosures framework, noting that it will evaluate the extent to which investors are addressing climate change in the stewardship of their investments starting with 2021.
Nokia CEO Rajeev Suri to step down
Finnish telecoms equipment maker Nokia announced that longstanding CEO Rajeev Suri will step down and be replaced by former executive Pekka Lundmark, effective September 2020. The announcement comes one month after US Attorney General William Barr declared that the US should acquire a controlling stake in Nokia to counter Huawei’s dominance, and three months after Nokia revealed that Sari Baldauf will take over as Chairman at the April 2020 AGM. Lundmark has been serving as CEO at Finland’s state-owned energy group Fortum since 2015, where Baldauf chaired the board between 2011 and 2018. The leadership reshuffle occurs against the backdrop of mounting speculation that Nokia is considering a merger with Swedish rival Ericsson to create a European telecoms giant.