January 28, 2021 | Editor: Martin Wennerström
Home Depot and Omnicom face shareholder resolutions over ad buys
Home Depot and Omnicom Group are both facing shareholder resolutions calling for an independent third-party investigation into the link between their social media advertising and “violations of civil or human rights.” The two identically worded resolutions were filed separately in November 2020 by activist shareholder Myra K. Young and The Nathan Cummings Foundation, respectively, with coordination from the corporate accountability nonprofit Open MIC. The resolutions’ supporting statements accuse Facebook and Google of “failing to protect civil and human rights by supporting government censorship, facilitating white supremacist activity, and enabling voter suppression” while suggesting that Home Depot and Omnicom could face reputational and business risk through their advertising on these platforms.
Unless they are successfully excluded through the SEC, the resolutions would be voted on at the firms’ upcoming 2021 AGMs. Home Depot is estimated to be one of Facebook’s largest spenders, while Omnicom sits on Facebook’s “Client Council,” which advises on advertising and marketing. Notably, neither firm joined the highly publicized advertiser boycott against Facebook in 2020.
Omnicom Proposal | Home Depot Proposal | Open MIC | NYT | WSJ | Marketing Dive
Disney decides to cut executive bonuses
Walt Disney Co. has eliminated executive bonuses for 2020, in an effort to mitigate the impact of the COVID-19 outbreak. Executive Chairman Robert Iger saw his pay slashed in half, with his total 2020 compensation amounting to USD 21 million, as compared to 47.5 million in the previous year. Robert Chapek, who assumed the position of CEO in February 2020, earned a total payout of USD 14.2 million – significantly lower than the CEO’s pay in previous years. Moreover, Iger agreed to forego his salary and a USD 5 million completion bonus, while Chapek took a 50% salary cut. Notably, Disney also intends to link 2021 bonuses to revenue and to eliminate EPS and ROIC from its performance metrics.
Toshiba investor requests court approval to hold EGM
Toshiba’s largest shareholder, Effissimo Capital Management Pte Ltd., has asked for court approval to itself call an EGM if Toshiba fails to officially do so within two months of the fund’s December 17 request. Effissimo, which holds around 10% of voting power, has requested that the conglomerate call an EGM in order to launch a third-party probe into vote counting at the firm’s July 2020 AGM. Soon after Effissimo’s request, Toshiba received a second EGM request from another major shareholder, U.S. hedge fund Farallon Capital Management. According to a recent filing, Toshiba plans to hold the EGM by the end of April, but has yet to make a formal announcement.
Toshiba (1) | Toshiba (2) | Reuters | Nasdaq | PR Newswire
Ardian and GIP approach Suez with a EUR 11.31 billion bid
Suez has received a buyout offer from investment firms Ardian and Global Infrastructure Partners at EUR 18 per share. The offer could lead to a contest between the two investors and Suez’ largest shareholder Veolia Environnement, which has already offered the same price for the 70.1% of shares that it does not own. Suez’ board, which opposes Veolia’s takeover attempt, has unanimously supported the Ardian/GIP proposal, citing a lack of the antitrust and worker job security concerns presented by the Veolia offer. Suez has expressed its willingness to engage with Veolia, which has stated that its stake is not for sale.
Reuters | Ardian | Market Watch | Suez
Governance in Brief – June 1, 2023
Citigroup to IPO Banamex after Mexican gov’t interventions hamper sales deal Citigroup has announced a plan to spin off its Mexican business, Banamex, after a failure to sell the unit to conglomerate Grupo Mexico. Citigroup had been in talks with German Larrea, CEO and Chairman of Grupo Mexico, for over a year in an attempt to orchestrate the sale of the bank, which was first announced at the start of 2022.
Governance in Brief – May 25, 2023
Activist investor pushes for leadership and strategy changes at NRG Energy Activist investor Elliott Investment Management has disclosed a 13% stake in the US-based NRG Energy and called for leadership and operational changes at the company to remedy its “meaningful underperformance.” The investor urged NRG to add independent directors with experience in the power and energy sector to its board, noting that it has already identified five executives to guide the operational and strategic changes.
Governance in Brief – May 19, 2023
EU court sides with Ryanair on Lufthansa’s 2020 bailout. The EU General Court, the second-highest court in the EU, has annulled the European Commission’s decision on the approval of state bailout for Deutsche Lufthansa prompted by the 2020 pandemic. The judgment found the EC erroneously considered that Lufthansa could not obtain financing on the markets and failed to ask for the implementation of an incentive mechanism for the airline to buy back the German Government’s stake.
Governance in Brief – May 11, 2023
JPMorgan Chase takes over failed First Republic Bank JPMorgan Chase has acquired the assets and deposits of First Republic Bank after California authorities seized and auctioned the troubled lender. The Federal Deposit Insurance Corporation (“FDIC”), an independent governmental agency established to maintain financial stability through the insurance of banks’ deposits, took possession of First Republic Bank after the lender suffered a severe liquidity crisis following the failure of SVB and Signature Bank earlier in March.