governance in brief

Governance in Brief – October 21, 2021

The U.S. SEC has announced that it is reopening comments on a proposed rule that would claw back executive compensation in cases of financial restatement due to “material noncompliance.” The rule was initially proposed in 2015, as mandated by the Dodd-Frank Act, but has yet to be finalized. The clawback would apply to incentive-based compensation awarded to current and former executives during the three fiscal years preceding the restatement “regardless of whether the misstatement was due to fraud, errors, or any other factor.” The recovered amount would equal the excess compensation relative to the amount to which executives would have been entitled based on the restated financial statements. The clawback provisions would apply to compensation that is granted, earned or vested upon the attainment of a financial reporting measure, including stock price and total shareholder return. Additionally, under SEC’s proposal, stock exchanges would have to establish listing standards requiring public companies to adopt and comply with clawback policies. Issuers would be subject to delisting in case they fail to disclose their policies and comply with their provisions. The SEC is seeking public input on the proposed rule for a period of 30 days.

governance in brief

Governance in Brief – October 14, 2021

A federal jury has ordered Tesla to pay USD 137 million to a contract worker over claims of workplace racism. Plaintiff Owen Diaz accused Tesla of creating a hostile work environment and failing to address racial abuse despite repeated complaints.

governance in brief

Governance in Brief – October 07, 2021

At its 2021 AGM, Frasers Group shareholders approved a GBP 100 million compensation scheme for incoming CEO Michael Murray, amid backlash from independent investors. While the remuneration policy was supported by nearly 85% of votes cast, there was around 49% dissent among independent shareholders.

governance in brief

Governance in Brief – September 30, 2021

The U.S. Department of Justice has opened an investigation into Zoom Video Communications’ deal to buy American software company Five9, citing potential national security risks posed by foreign participation. In July, Zoom had announced an all-stock deal to acquire Five9 for USD 14.7 billion, contingent on Federal Communications Commission (“FCC”) approval.

governance in brief

Governance in Brief – September 23, 2021

Philip Morris International Inc (“PMI”) secured nearly 78% of UK inhaler maker Vectura’s shares through a public tender offer. These developments mark a milestone in PMI’s pursuit of Vectura, which involved a bidding war with U.S. private equity firm The Carlyle Group and backlash from health groups.

governance in brief

Governance in Brief – September 16, 2021

Private market investors and global non-profit organization CDP launched the Private Markets Pilot which aims to increase environmental disclosure from private companies. The CDP platform will allow investors to benchmark private companies and compare them in terms of environmental performance.

governance in brief

Governance in Brief – September 9, 2021

Bernard Arnault’s Financière Agache Financière Agache investment firm exits Lagardere's personal holding company. Shareholder agreements between Financière Agache and Arnaud Lagardere will be ended.

governance in brief

Governance in Brief – September 2, 2021

Nike’s upcoming AGM will consider shareholder proposals regarding diversity, pay equity, political spending and human rights, all of which are opposed by the board.

governance in brief

Governance in Brief – August 26, 2021

Kansas City Southern delayed the shareholder vote on its takeover by Canadian National Railway pending the US rail regulator’s verdict on the deal.

governance in brief

Governance in Brief – August 19, 2021

The Securities and Exchange Commission (“SEC”) has approved Nasdaq’s proposal to boost race and gender diversity on U.S. corporate boards.

governance in brief

Governance in Brief – August 12, 2021

Investors managing over USD 14 trillion of assets have released a set of expectations for companies through the Institutional Investors Group on Climate Change (“IIGCC”). These are set forth in a “position statement” calling for new corporate governance measures aimed at ensuring that companies can be held accountable for meeting their net zero emissions commitments.

governance in brief

Governance in Brief – August 05, 2021

Activision Blizzard Inc. faces an investor class action lawsuit alleging that it failed to disclose an investigation by the California Department of Fair Employment and Housing (“DFEH”), which ran for two years and culminated in the agency filing a separate civil suit against the company on July 20, 2021.

governance in brief

Governance in Brief – July 29, 2021

The Japanese Financial Services Agency released an updated Corporate Governance Code which is focused, inter alia, on board independence, diversity, and sustainability.

governance in brief

Governance in Brief – July 22, 2021

Prosus NV shareholders approved a voluntary share exchange offer for parent company Naspers. The deal seeks to decrease both companies’ significant NAV discount, particularly with regard to Prosus’ 28.9% stake in China’s Tencent.

governance in brief

Governance in Brief – July 15, 2021

The OECD will review the G20/OECD Principles of Corporate Governance aiming to adapt these “to the post-COVID-19 reality.” The organization noted that the pandemic aggravated structural weaknesses in the “corporate sector” and concluded that strengthening corporate governance should be a priority to promote economic recovery.

governance in brief

Governance in Brief – July 8, 2021

Sportswear retailer JD Sports Fashion’s annual general meeting concluded with the resolution to oust the remuneration committee chairman.

governance in brief

Governance in Brief – July 1st, 2021

Toshiba’s annual general meeting concluded with the resolution to oust the board chairman and an audit committee member after an independent probe into potential vote manipulation.

governance in brief

Governance in Brief – June 24, 2021

The Activision Blizzard non-binding say-on-pay resolution was approved during the latest annual general meeting with only a 54% majority.

governance in brief

Governance in Brief – June 17, 2021

Netflix ‘s shareholders expressed discontent over the streaming giant’s governance structure and unresponsiveness towards past shareholder proposals.

governance in brief

Governance in Brief – June 10, 2021

The U.S. SEC will not enforce the changes to its proxy advisory regulations that it adopted in July 2020. Moreover, it will consider “further regulatory action” following a review of both these rules and related guidance documents issued in 2019.