November 11, 2021 | Editor: Martin Wennerström
SEC publishes new guidance on shareholder proposal exclusions
The U.S. Securities and Exchange Commission (“SEC”) has published new guidance that will make it more difficult for companies to block ESG-related shareholder proposals from being included on proxy ballots. Under the previous guidance, corporations were able to exclude proposals that dealt with matters relating to the company’s ordinary operations unless they raised significant social policy issues for the company. Additionally, proposals related to operations accounting for less than 5% of the company’s assets and earnings were subject to exclusion. Under the revised guidance, the previous company-specific approach would be replaced by a broader societal impact analysis. Specifically, proposals that the SEC previously deemed excludable due to their lack of a significant company-level policy issue will no longer be viewed as such if they have a broad societal impact. Additionally, proposals related to operations not meeting the economic thresholds should not be excluded provided they raise issues of broad social concern related to the company’s business. Moreover, companies will not be able to exclude climate-related resolutions if they require timeframes or targets “so long as the proposals afford discretion to management as to how to achieve such goals.”
Novartis sells back Roche stake
Novartis has agreed to sell back to Roche its stake in the company, which currently accounts for roughly 33% of Roche’s voting rights, in a USD 20.7 billion deal. The transaction comes amid growing competition between the two drug makers and record trading prices for Roche stock. While Roche said that the “disentanglement of the two competitors” will help it “regain full strategic flexibility,” Novartis reported that the deal is consistent with its strategy as a focused medicines company. Roche plans to cancel the repurchased shares. Following the deal, which is pending Roche shareholders’ approval, the wider Roche family will increase its voting power to 67.5% from current 45%.
Rubix cancels IPO plans
Rubix Group Holdings (“Rubix”), a UK- based supplier of industrial products, has scrapped plans to go public on the London Stock Exchange “given the difficult ongoing conditions for IPOs.” The decision follows similar ones recently announced by other companies, including France’s Icade Santé and Switzerland’s Cronext, on the background of increasing inflation and concerns related to the property market in China. Rubix announced plans to go public in October. At that time, it said it planned to raise USD 850 million by issuing new shares and potentially selling existing ones. The company targeted a free float of at least 25%.
Volkswagen board committee to discuss CEO’s position
Volkswagen's board-level mediation committee will reportedly discuss the future of CEO Herbert Diess, amid tensions between the company’s management and the works councils. Diess has reportedly told a recent board meeting that 30,000 jobs would be at risk if the company were to slow in its transition to electric vehicles. The committee, which includes a works council member and the head of IG trade union, is expected to make a decision by the beginning of December. Diess, who took the CEO role at the carmaker in 2018, continues to have the support of Volkswagen’s controlling shareholder, Porsche Automobil Holding SE.
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.