Governance in Brief – June 9, 2022

Posted on June 9, 2022


June 9, 2022 | Editor: Martin Wennerström 

Download PDF


Shopify CEO gets guaranteed voting power

Shopify’s 2022 AGM approved a proposal to grant special voting rights to CEO Tobi Lütke through a non-transferable founder share. The share would guarantee Lütke at least 40% of voting rights, contingent on continued employment and independent of the outsized influence that he otherwise enjoys by holding supervoting class B shares. Nearly 50% of the voting power has been thus far held by Lütke and investment firm Klister Credit Corp. In connection with the new structure, Klister agreed to convert its class B shares to non-supervoting class A shares, leaving the CEO as the sole class B shareholder. According to the articles, if class B shares fall under 5% of the total number of issued A and B shares, class B shares will convert to class A on a one-for-one basis, effectively reducing the holder’s voting power. The founder share would, however, allow Lütke to maintain his 40% voting rights despite further class A stock issuances. 



Leonardo CEO dodges liability action

At Leonardo’s 2022 AGM, shareholders opposed, for the second consecutive year, Bluebell Partners’ proposal calling for a liability action against CEO Alessandro Profumo. In 2020, Profumo was sentenced to six years imprisonment on charges of false accounting during his time as Chairman of Banca Monte dei Paschi di Siena. Bluebell argues that Profumo’s presence poses reputational and operational risks. Further, the investor accused the firm of having delayed the publication of the motion for liability action against the CEO ahead of the 2021 AGM.

 

Toymaker Hasbro fends off proxy fight

At the 2022 AGM, Hasbro shareholders approved the re-election of all 13 board directors while rejecting shareholder Alta Fox Capital Management’s nominee. In February, Alta Fox (2.5% stake) launched a proxy fight against Hasbro, initially nominating five alternate candidates. Further, the investor suggested a spin- off of the toymaker’s Wizards of the Coast unit, which contains the lucrative Magic: The Gathering and Dungeons & Dragons franchises. Alta Fox argues that the firm is falling behind peers, having underperformed the S&P 500 by nearly 100% in the past five years, and has highlighted a lack of financial discipline at board level.


CNBC | US News | Hasbro (1) | Hasbro (2) |



Activist investor Nelson Peltz joins Unilever board

Unilever has appointed Nelson Peltz as a non-executive member on its board and compensation committee, effective July 20. Peltz holds a 1.5% stake in Unilever through Trian Fund Management, L.P. His appointment comes as the firm is cutting 1,500 management jobs and reorganizing itself into five divisions along product lines. Chairman Nils Andersen praised Peltz‘s experience within the consumer goods industry, while several investors and analysts welcomed his appointment, which they expect to help the company’s strategic review. Peltz served on the board of P&G until late 2021, where he pushed for a company overhaul.





 

Recent Content

governance in brief

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.

Read More Newsletter
governance in brief

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.

Read More Newsletter
governance in brief

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.

Read More Newsletter
governance in brief

Governance in Brief – May 4, 2023

TotalEnergies sells Canadian oil sands operations to Suncor TotalEnergies has announced that it will sell its Canadian operations to Suncor Energy, in an agreement worth up to CAD 6.1 billion (USD 4.47 billion). The French energy giant had originally planned to exit Canadian oil sands by spinning off TotalEnergies EP Canada, but later agreed to instead sell the operations after having received unsolicited offers from both Suncor and other parties.

Read More Newsletter