January 26, 2023 | Editor: Martin Wennerström
Elliott set to add new director to Suncor Energy’s board
Elliott Investment Management (“Elliott”) is likely to appoint a fourth director to the board of Suncor Energy, after the energy company continued to underperform its peers in the second half of 2022. The measure is part of an agreement reached by the two parties in July of last year, after the activist investor had called for an overhaul of Suncor’s leadership, assets, and operations due to its lagging share price and poor safety records. Owing to the truce, Elliott has already added three independent directors to Suncor’s board. However, the agreement entitles the investor to require an additional board seat should Suncor’s total shareholder return (“TSR”) underperform that of a peer group by 10% or more in the second half of 2022. Suncor’s TSR underperformed the peer average by approximately 15% in the period.
SEC (1) | SEC (2) | Calgary Sun | Canada Today |
Bain Capital eyes Virgin Australia IPO
Bain Capital is considering relisting Virgin Australia and will “shortly seek advice” on a potential IPO. The U.S.-based private equity firm bought Virgin Australia for AUD 3.5 billion (USD 2.4 billion) including liabilities in 2020, after the airline was placed into voluntary administration as travel demand plunged during the pandemic. Bain Capital, which plans to retain a significant shareholding in a future IPO, has reportedly issued requests for proposals on the listing to eight or nine investment banks, with appointments expected to be made within a month. Virgin Australia returned to profitability in November 2022 after several years of loss.
Yahoo | AFR (1) | AFR (2) | AFR (3) | CH Aviation | SMH |
Netflix founder steps down from co-CEO role
Netflix co-founder Reed Hastings is stepping down from the co-CEO role and will serve as Executive Chairman “for many years to come.” Co-CEO Ted Sarandos will remain in his position, while Chief Operating Officer Greg Peters will assume the co-CEO role, replacing Hastings. According to Hastings, the management of the company has already been delegated to the current two co-CEOs for two and a half years. The leadership succession announcement came as the company reported a higher-than-expected rise in the number of subscribers in the fourth quarter of 2022. Hastings co-founded Netflix in 1997 and had held the co-CEO role since 2020.
Yahoo | Netflix | CNBC | Guardian |
JPMorgan Chase keeps CEO’s compensation unchanged
JPMorgan Chase announced that CEO James Dimon’s annual compensation for FY2022 has remained unchanged at USD 34.5 million. Additionally, the board has not granted any special bonus to Dimon in FY2022 and has committed to not grant any special awards to him in the future. In FY2021, Dimon was granted a special option award with a grant fair value of USD 52.6 million. Dimon’s total compensation includes an annual base salary of USD 1.5 million and performance-based variable incentive compensation of USD 33 million, with 85% of it being delivered in performance shares based on three-year absolute and relative ROTCE performance.
Governance in Brief – March 23, 2023
SVB Financial Group sued after the collapse of Silicon Valley bank unit SVB Financial Group, the parent company of Silicon Valley Bank, and two of its top executives, CEO Greg Becker and CFO Daniel Beck, are being sued by shareholders following the bank’s collapse. The lawsuit, filed by retail shareholder Chandra Vanipenta on behalf of a group of shareholders, accuses the bank and its two top executives of filing false and misleading financial reports.
Governance in Brief – March 16, 2023
Canada introduces climate reporting framework Canadian regulators have issued new guidance for the country's banks and insurance companies to better manage climate-related risks. The framework, which requires disclosure on governance, strategy, risk management, and metrics related to financial institutions’ greenhouse-gas emissions, was first drafted in 2022.
Governance in Brief – March 9, 2023
The U.S. Congress has passed a resolution repealing a Department of Labor (“DOL”) rule empowering retirement plan managers to consider climate change and ESG factors in their investment decisions. The rule, introduced by the Biden administration, falls under the Employee Retirement Income Security Act (“ERISA”), a federal law which sets protection standards for participants in private pension plans. Biden’s ruling entered into force in January this year, overturning prior Trump-era DOL rules that limited pension fund managers to restrict their investment strategies to “pecuniary factors.”
Governance in Brief – March 2, 2023
Indian regulator proposes enhancement to ESG disclosure rules India’s securities and market regulator SEBI has released a new ESG disclosure framework for public consultation. The proposed regulations impact India’s 1,000 largest companies by market capitalization, ESG funds and ESG ratings providers. For the largest companies, the regulator proposes areas of assurance of ESG disclosures and reporting and assurance of ESG footprint of the supply chain. The proposals expand on the 2021 Business Responsibility and Sustainability Report (“BRSR”) guidelines and propose mandatory assurance of certain KPIs under ESG disclosure. The KPIs contain intensity ratios such as GHG emissions, water consumption, and waste generation. For supply chain, SEBI will introduce a comply-or-explain approach for the top 250 companies starting in 2024, and assurance beginning in 2025. For ESG funds, SEBI proposes that at least 65% of AUM be invested in companies reporting on comprehensive BRSR and provide assurance on BRSR core disclosures. Under the proposed rules, ESG rating providers should also provide a “core ESG rating” based on assured information in addition to their own products.