June 10, 2021 | Editor: Martin Wennerström
SEC to halt implementation of proxy adviser rules
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. The new regulations and guidelines, both adopted under the Trump administration, had been criticized for
allegedly weakening investors vis-à-vis management. The changes mandated enhanced disclosure of proxy voting
policies, the release of proxy reports to issuers ahead of publication, as well as proactive and transparent disclosure
of issuer feedback to institutional shareholder clients. While the amendments officially entered into force in November
2020, proxy advisers had had until year-end 2021 to comply. In response to the restrictions, proxy adviser Institutional
Shareholder Service (“ISS”) had filed a lawsuit against the SEC in October 2019. However, the SEC recently filed a
motion, reportedly supported by ISS, to suspend the litigation in light of the regulator’s new stance.
Robinhood adds big names to board
Robinhood Markets Inc. announced the addition of three new independent directors to its board ahead of its imminent IPO. These include Amazon’s lead independent director Jon Rubinstein, who will also become Robinhood’s lead independent director. PwC partner Paula Loop will also join the board, helping the brokerage firm to comply with legislation requiring public companies headquartered in California to have women on board. The third nominee is former World Bank President Robert Zoellick.
Germany potentially to participate in Lufthansa issuance
Germany is considering participating in Deutsche Lufthansa’s planned EUR 3 billion capital increase, which is expected later this year. It plans to use the proceeds to pay a part off the EUR 5.5 billion “silent participation” that was included in the company’s EUR 9 billion bailout package. By participating in the capital increase, the German government would limit the dilution of its 20% stake. Germany is reportedly considering two options: either selling a part of its subscription rights and using the proceeds to buy new shares, or spending an additional EUR 1 billion by exercising its existing subscription rights.
Nord Gold plans IPOs in London and Moscow
Nord Gold Plc (“Nordgold”) is planning an IPO on the London Stock Exchange (“LSE”), while also applying for a secondary listing on the Moscow Exchange. The decision comes on the back of rising gold prices. Nordgold plans to have a free float of at least 25% of its issued share capital and expects to be eligible for inclusion in the FTSE UK indices. The company is reportedly valued at GBP 3.5 billion. Nordgold had delisted its global depositary receipts from the LSE in 2017, as its board had considered the company to be inappropriately valued at that time.
Governance in Brief – June 8, 2023
European Parliament approves CSDDD The European Parliament has approved the “Corporate Sustainability Due Diligence Directive.” Under the new rules, companies will be required to identify and address the negative impact of their activities and value chains on human rights and the environment. Additionally, companies will need to implement climate transition plans, and, in the case of companies with more than 1,000 employees, tie directors' variable compensation to target achievement.
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.